Sunday, August 14, 2011

Adventure in Buying Auction Property - Part 3/3 (The Financing)

After getting the stamped Proclamation of Sale (not sure if this is the right term), I have 3 months to get the loan and pay the bank. I thought it will be easy enough to get financing and so I started work on the flat first.

The 3 days Haris said will finish the work turn into a few more and wiring also took a while coz Raja was doing it part time. But it's alright since it also took me a while to settle Syabas & TNB. Went to Syabas early but they said there's no meter available to install. TNB was easy. All in all, took me a month to settle the renovation and now it's time to look into financing.

Halim the auction guy gave me his contact for law firm and they quoted around RM1,800 for the whole thing. I asked a guy at the bank's law firm if they can take my case but he said it's not possible to represent the bank and me at the same time. So I asked him to suggest his friend which he did and the guy quoted me RM1,500; which is cheaper so I go with this firm.

Next will be to look for financing.

Silly me. I thought it was easy to get one. After all, I cleared up my credit card debts long time ago and don't owe anybody anything anymore. I used to have a bad debt with Celcom way back from 1998 (remember Motorola 8870? hehehe) but I settled that when I moved to Kulim in 2006 coz Digi didn't have good reception there.

Since the auction was by Maybank, it was my first choice and walk in there confidently. But lo and behold, was told that they don't give housing loan for under RM50k. My heart stopped for a minute there and after a hard front for nice composure, my smile muscles must have ached a lot then, I walked off heavy.

Since I was told that is the general thing among banks, my next choice was personal loan. So off to Bank Rakyat I went. Again, no luck. My current employer is not in the panel list :). Final choice is the normal banks personal financing which has around 8% interest rate.

Suddenly buying this flat is not attractive anymore. Called around and the lowest I think was Bank Islam at 6%.

So went home, talked to the wife, look at our savings. Called my mom. Rejected. Plus, they don't have that much anyway. Check our savings again.

Turn out we need only RM10k from outsider. Obvious choice was my sister in law. She's a nice person but strict. Lucky she has some savings then.

So we settled the bank financing at the expense of our own savings.

With a total cost around RM40k (I forgot the lawyer fee in previous post), I think it will take us around 9 years to get that money back (simple math, no inflation and stuff). By that time I will be around 50 years old and not knowing how my income will be after 55, at least the rental will be some cushion.

Retirement planning. The reason I'm doing this and knowing my own character that, liquid cash is not that safe with me. Though I hope that, whatever we do, we don't forget the King of Kings, Sustainer of the worlds, whatever He wills will come .... and for us, for His mercy to be greater than His judgement. Forgive me and Bless them O Lord.

Pic from Google

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