What our customers say about us

Thanks for all your help and for making it so easy for me. Life will be so different now.

Jan Vincent
Montrose, VICTORIA

Thank you very much for the service you provided us regarding the refinance of our home loan. All went well and smoothly with no problems. We are happy with the new loan arrangement. Once again, thank you very much for your assistance.

Bala Krishna
Cranbourne VICTORIA

We have found Barry Le Brocq of Melbourne Mortgage Finance to be very patient, caring and diligent in achieving a successful outcome to our refinancing requirement. We have no hesitation in recommending his services to others.

Don & Christine Perrett
Leongatha, VICTORIA

Many thanks Barry for the exceptional service that you have provided. We will most certainly be recommending you to our daughter (Bank of Melbourne branch manager) for any future customers who need a reverse mortgage loan.

Paul & Barb Spark
Somerville VICTORIA

 

LENDING UPDATE 24.09.18

  • Product of the month : 3.62% fixed for 2 years
  • Tips for First Home Buyers
  • A reverse mortgage loan can fund an Aged Care bond
  • If your bank says “No”, alternative lenders are available
  • Use a Deposit Bond when cash is not available

What is a Deposit Bond?

In Australia when a person or entity enters into a contract to purchase residential property, it is common practice for the purchaser to lodge a cash deposit of up to 10% of the purchase price with the vendor’s solicitor as security for the purchaser’s obligations. The deposit gives the vendor (the seller) a fund which they can claim if you fail to complete the transaction.

A Deposit Bond, by agreement with the vendor, can replace the need for a cash deposit. It is a convenient way of purchasing a property without the need to arrange a large cash deposit or immediately cashing in or selling an investment that may mature at some point in the future. The Deposit Bond is issued by an insurer to the vendor for all or part of the deposit required.

If the purchaser fails to complete the purchase of the property, the vendor or the holder of the Deposit Bond has the right to present the Deposit Bond to the insurer and claim the full amount of the Deposit Bond. The insurer will then seek reimbursement from the purchaser for any monies paid by it plus any other costs and expenses.

In essence, a Deposit Bond enables the purchaser to defer payment of the 10% deposit until settlement date.

A Deposit Bond is NOT a policy of insurance. It is a form of guarantee.

A Deposit Bond can be a quick and efficient way of arranging the deposit for the purchase of a residential property. Arranging a cash deposit may take time, especially if the purchaser has not sold their current property or needs to sell investments to raise the required deposit.

Deposit Bonds enable purchasers to take advantage of opportunities when they arise.

The product is suitable for virtually anyone contemplating the purchase of a residential property including:

  • Future home buyers
  • Home owners upgrading to a new property
  • Investors wishing to purchase property or additional properties
  • Owners or investors wishing to purchase properties off the plan

It’s especially convenient for investors who may have funds tied up in non-liquid assets and who wish to purchase properties when opportunities arise. Finding the 5% or 10% required to enter into a contract on another property may be difficult when investment opportunities arise at short notice. Arranging bank finance or short-term loans may take time and associated costs may be high.

Deposit Bonds are also extremely convenient for older couples who are looking to purchase a property off the plan in anticipation of settling the transaction in one or two year’s time. The preferred option for people in this situation is to sell their house, six months before settlement, however having to raise a large deposit at the time when contracts have to be exchanged may create an unnecessary financial burden. The Deposit Bond allows them to enter into the transaction and retain their current property until it is more convenient to sell it and settle the future purchase.

NO. A deposit bond is a guarantee that the deposit will be paid at a future date. Deposit bonds are underwritten by an insurer that guarantees the vendor that the deposit will be paid in full at settlement. The purchaser is still required to pay the deposit in full. The deposit bond saves the purchaser from the need to pay the full deposit in cash when signing a contract to purchase. This means that purchasers can keep their cash and may negate the need to break investments, sell shares or arrange loans to pay the deposit now.

Vendors should accept a Deposit Bond in lieu of a cash deposit. However, most Standard Contracts for Sale require a cash deposit to be paid.

Therefore, before you agree to purchase a property check with the vendor that they will accept a Deposit Bond. You should also ensure that your solicitor or legal representative inserts the relevant clauses into the Contract for Sale to enable the Deposit Bond to replace the cash deposit.W

Deposit bonds are split into two types:

  • Short term bonds for three and six month periods; these are ideal for purchasers buying at auction.
  • Long term bonds which are generally issued for periods of twelve months to thirty six months (some bonds are issued for up to 48 months); generally issued for properties yet to be built or “off the plan”.

The Deposit Bond expires on the earliest of:

  1. the contract for Sale being completed;
  2. the Expiry Date;
  3. the Contract for Sale being terminated or rescinded and the purchaser being entitled to a refund of the deposit;
  4. payment to the vendor by the Insurer of The Maximum Bond Amount or such part as the vendor may require; and
  5. payment to the Vendor by the Purchaser of the Maximum Bond Amount or such part as the vendor may require.

This varies depending on the bond term. However, typically a Deposit Bond can be arranged quite simply by submitting a simple application form and supporting documents including

  • copy of lender’s written approval
  • copy of signed Contract of Sale
  • evidence of all required customer deposit

Melbourne Mortgage Finance offers an extensive range of mortgage products and services including

Home Loans, Investment Loans, Equity Access Loans, Low Doc Loans, 100% Loans, Refinance Loans, Commercial Loans, Deposit Bonds, Reverse Mortgages, Accommodation Bonds, Vehicle Finance, Plant and Equipment Finance, Financial Planning and Business Finance.

IMMEDIATE appointment can be made to meet at your home or office

  • NO CHARGE for assisting you. We receive a standard fee from the lender you select
  • reliable service, communication and follow-up. See “Testimonials
  • accreditation with 20 national lenders, allowing you to select from an excellent range of loans
  • we carefully listen to your needs, do our research, then present you with a short-list of three potential loan solutions. You choose the lender.
  • printouts of products, fees, interest rate and loan features are provided
  • arrange for your property insurance and personal insurance requirements to be assessed
  • ongoing availability to assist you after loan settlement
  • over 30 years experience in arranging finance and mortgage loans