What is the Zurich Property Deposit Guarantee?
It’s a financial guarantee made to the property developer on your behalf. It removes the need for you to pay a large cash deposit for your yet-to-be-built home. Instead, you simply pay the whole property price when the house is finished and ready to move into.
How much does it cost?
The cost depends on how much you need to guarantee and for how long. You can use our online calculator to get a quote. Based on the length of time between exchange and completion, we’ll work out a guarantee term for you. Guarantees are available in fixed terms of 6 months to 5 years.
How does the Zurich Property Deposit Guarantee Work?
- We ask you to complete a straight forward application form and pay a processing fee costing from £99 depending on your country of residence(+VAT). To complete the application process, we may ask you to produce some supporting documents such as bank and mortgage statements.
- We recommend that you take independent legal advice before you buy the Guarantee
- Once approved, you sign an important legal indemnity and pay a one off amount to buy the guarantee. This amount would be much smaller than the deposit you’d normally have to pay at this stage
- The Guarantee is accepted by the developer as your promise that you will pay the full purchase price, including the deposit amount, at completion.
- Once the 14 day cooling off period is complete, contracts are exchanged as normal.
- When your new home is ready, you complete in the usual way. The Zurich Property Deposit Guarantee does not count towards the purchase price.
Why should I purchase a Guarantee?
- It means your dream home won’t slip through your fingers
- It’s secure and guaranteed by the strength of Zurich Bank
- It’s easy to apply
- You can stay in control of your savings until the time comes to complete
- You wouldn’t have to raise money for your deposit by releasing equity from an existing property
- You can avoid the expense and time delays that may be involved in arranging bridging finance
Anything else I need to consider?
Most importantly, the Guarantee does not replace the need for a deposit; you still have to find the money to complete on your new property when the time comes. If you don’t complete you will still owe Zurich Bank for the full amount of the Guarantee.
As it costs money to buy the Guarantee and you can’t get this money back, you need to be sure that the benefit of holding onto your savings now is not outweighed by this one-off cost. Also, if it takes longer than anticipated to build your new property, you may need to extend your Guarantee. There would be an additional fee for this renewal service. |
