Mortgage Mayhem

Obviously need to sort a mortgage out and Serliana put me in touch with their mortgage provider Savills Private Finance. As with the Solicitor I’m not sure if they offer the best deal on the block but they are mentioned in a lot of the property pages that I have researched and, again, the point of using the investment company is that they get me the best deal.

Craig from Savills rang and asked me what sort of mortgage I was looking for, …er didn’t want to be seen having a “blond moment” but what sort can you have? I said I’d get back and rang my sister in law, Jenny, who works in finance mainly arranging wills etc but I assume it’s the same sort of thing. She suggested that the interest rate is likely to go up in the short term, so get a fixed rate, and that we would probably need to refinance after 2 years to prevent us being trapped in a high interest mortgage so make sure that there are no lock in penalties after 2 years. Sounded good to me so I called Craig and he said good choice (so why didn’t he suggest it?).

I had to fill out a mortgage application form and go through the 2 pieces of primary and secondary id routine again (another piece of advice, keep your recent payslips and utility bills close to hand!). Savills seem an efficient type of organisation, I suppose that my only criticisms was that they didn’t keep me up to date with what was going on (not that I could do anything but I wasn’t sure what they were doing) and I could have really done with a bit more help and advice on completing the mortgage application form. Actually I screwed it up and they had to make some corrections and resend it to me.

They have come back with a GMAC RFC mortgage which I have seen referred to on the Singing Pig property forums so I assume that is pretty standard for a buy to let property.

3 in 1 Strategy, not that happy

Got a note from Serliana about launch of a new property at a place called Denholm court in Essex. Its quite attractive because using the deal structure its possible to get ownership of it at quite a low cost. I discussed with them and they sent me a proposal to buy Park Central, Adelaide Wharf and Denholm Court. I had a read through but figures didn’t add up to me (also it was on a spreadsheet that had been used for something else because it had another property on it that had been zeroised).

I spoke to them and they sent me a note apologising and suggesting that in order to afford it I would need to either borrow some more money or use some of the cash I’d put aside for the extension to my current house. I wasn’t too happy about either of these suggestions, in their literature they always emphasise the lifestyle elements of property investment and the need to “cashflow” ie ensure that you have enough money put aside to cover the investment and the additional costs that accompany it. Yet here they are suggesting that I impact my lifestyle by stopping the extension or borrow more money which is going to put my cashflow at risk! It’s not like I’m even been offered a special rate for buying 3 in one go.

Important lesson if you don’t think you can afford it and/or you feel uncomfortable with it then don’t do it.

Document City 2 and a Nasty surprise!

Got another email from the solicitors Breytenbach’s with a shed load of Park Central documents to read and sign including

1. The Agreement.
2. Authority for Breytenbach & Co to sign the contract on your behalf
3. The Contract and Lease Summary
4. Draft Lease
5. Plan
6. Draft Management Scheme7. Mortgage Indemnity Letter

I read them as best I could but a lot of it was pretty meaningless to me, the odd vitally important clause camouflaged beneath paragraphs of indecipherable legalise!

It also contained Breytenbach’s comments on the contract which was very useful as it brought out the bits that needed thinking about. The nasty surprise was that to take on new tenants requires me to notify the Landlord (a company set up by Crest Nicholson to manage the property) and pay them £70.50 for each new tenancy which seems to be a bit unfair and wasn’t included in any of Serliana’s forecast of fees.

Also needed to pay them 5% exchange deposit of £7,697.50 and part pay Breytenbachs fees of £475 so all in all quite an expensive month! Got a note from them confirming that exchange on Park Central had taken place just need to get a mortgage now!