It is common practice when entering into a contract to purchase a residential property to lodge a cash deposit of up to 10% of the purchase price.  This deposit (which is held with the vendor's solicitor as security) gives the vendor a fund against which they can claim if you fail to complete the transaction.

A Deposit Bond is simply an agreement with the vendor to replace the need for a cash deposit.  It is an alternative and convenient way of purchasing a property without the need to arrange a large cash deposit.  The Deposit Bond is issued by an insurer to the vendor for all part of the deposit required. 

If the purchaser fails to complete the purchase of the property and has used a Deposit Bond, 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.

Mortgage Mates through our highly trusted affiliates can assist you with any Deposit Bonds requirements you may have.