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Product category: Savings and investment
News Release from: Exchange Insurance Company | Subject: Exchange Bond
Edited by the Insidemoneytalk Editorial Team on 08 November 2007

Exchange Bond helps first time buyers
get their foot on the property ladder

First time buyers, Amanda Roberts and partner, Karl Nunn, celebrated exchange of contracts on a new three-bedroom house near Newmarket earlier this week,

after the Exchange Bond helped them to meet otherwise difficult financial requirements 25 year old Amanda explains: "The house we decided to buy at Martingales, Red Lodge, was perfect but we struggled to afford it

We knew that we could meet the £180,000 mortgage repayments but we simply didn't have the cash lump sum required to secure the property at exchange of contracts.

We talked this over with the housebuilder, David Wilson Homes.

Although they helpfully agreed to take 5% off the property price, we still needed to provide some kind of financial deposit to guarantee that we would not default before completion."As with all new property purchases, there is a legal period of 28 days from the initial enquiry to purchase during which prospective homebuyers must guarantee their financial position in order to exchange.

Because of this requirement, Amanda and Karl found themselves racing against the clock to solve their financial conundrum.

Amanda continues: "Desperate not to lose our dream home, the time constraints were particularly stressful so we were greatly relieved when David Wilson Homes introduced us to the Exchange Bond - an entirely new concept to us and a real life-saver! We spoke to an Exchange Bond advisor, filled in a brief, simple application form and within a matter of days received confirmation that we had been issued an Exchange Bond allowing us to exchange on contracts.

The cost to us was a small premium and administration charge totalling about £400 - nothing compared to the 5% deposit we would otherwise have had to pay!"As a replacement for the traditional cash deposit, the Exchange Bond - developed by the Exchange Insurance Company (ExCo) - constituted the necessary financial guarantee for David Wilson Homes that the deposit value would be reimbursed if Amanda and Karl defaulted before completion.

This not only enabled them to avoid the initial deposit amount in favour of paying 100% of the purchase price on completion but it also ensured that David Wilson Homes secured their buyer and allowed the exchange process to proceed.

Frank Speight, ExCo's Sales and Marketing Director, comments: "The Exchange Bond is a very attractive alternative to making a cash payment on exchange when buying a property.

This is particularly true for first time buyers for whom an Exchange Bond can make the difference between making or breaking a property purchase.

With this in mind, we're delighted for Amanda and Karl since this is the type of situation that the Exchange Bond was designed to help."First time buyers, Amanda Roberts and partner, Karl Nunn.

For further information on the Exchange Bond, please visit: www.exchangebond.com.

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