• Whether a first-time buyer or self-employed, a RAMS home loan has flexible options to make the loan work better for you.

  • Deposit bond

    How you could arrange a deposit without touching your savings

    • Ideal for: First home buyers, Upgraders, Investors

      A deposit bond allows a buyer to pay a deposit (up to 10% of the purchase price) using the deposit bond instead of using cash from their own accounts. No money actually changes hands until settlement. 

      Come settlement, the purchase price is paid in full, and the bond simply lapses.

      Deposit bonds are often used for ‘off the plan’ purchases; where a buyer is awaiting funds from an existing sale; or an investor with adequate equity but minimal liquidity.

      Benefits of a deposit bond 

      • Keeps your savings working hard earning interest until required at settlement (if applicable)
      • Move faster to secure your purchase as a regular cash deposit can take time to organise
      • Could help avoid costly bridging finance
      • Valid  for both short and long-term loans
      • Can be used at auctions and private treaty exchange (subject to vendor acceptance in advance) 

      Deposit bonds – things to be aware of 

      • Some vendors are reluctant to accept deposit bonds as they may intend to use a regular cash deposit to fund another purchase or payment.
      • Also, a contract of sale may stipulate cash deposits only, so it’s essential that potential buyers/bidders clarify this upfront.
      • Fees and charges, conditions and eligibility criteria apply.

    • Hypothetical scenario

       Sylvia, a first home buyer, was keen on two properties, each with a price guide of approximately $500,000 and where the auctions were a month apart.

      The funds intended for a deposit ($100,000) were earning her good interest in a term deposit, which had a few months remaining on its term. To break it prematurely would incur a fee and a reduction in interest paid.

      Plus, there was no guarantee that Sylvia would be successful at auction anyway. So to keep her savings intact and purchase options open, a deposit bond looked like a good solution.  

      RAMS says … 

      First, Sylvia inquired of both real estate agents whether a deposit bond would be accepted by the respective vendors. 
       
      Turns out, it was. She then applied for and obtained a deposit bond through RAMS. 
       
      Although unsuccessful at the first auction, Sylvia was the highest bidder at the second, and was able to use her RAMS deposit bond as the deposit for her first home.  
       
      As it turned out, settlement was extended because the vendors were yet to secure their next property.  This delay didn’t bother Sylvia as her money was still earning interest in her term deposit, right up until settlement, when she paid the purchase price in full.

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