A tale of two sanders

I took a break from the plastering today and decided to work on the staircase instead, which meant getting these two out.

And putting the dodgy-looking mask on.

I have no idea what John Angie painted the paneling with, but it’s vaguely rubbery when heated and really doesn’t want to come off.  It’s taken me two sheets of 60 grit on the big sander to get this far.  I was going to paint the whole thing a matt chalk white, but thinking about it, this is the hall, and our doggy guests are going to walk straight in here and have a good shake if it’s raining – so I think I’ll paint the vertical boards and the inside panel of the stair side green to match the front door, then the bannisters and the frame around the stair side panel can be white.  Should show up splatter marks less, and I’ll make sure I do the front wall and inside the front door with kitchen and bathroom paint, so it’s wipeable!

You can see where the woodworm have had a good old munch under the paint.  No active ones, thank goodness.  This will take a little bit of wood filler to smooth out.

In other news, I finished plastering the north bedroom yesterday.  Those little dormer windows that I was insistent we opened up so you could stand in them, have 13 separate joints to plaster alone!

Finances-wise, there’s good news and bad news.  The good news is that the mortgage lender says we can have the mortgage.  The bad news is that we can only do it if we take the commercial holiday one on the same day and use the cash released to pay off the 0% cards immediately?  Why?  Well, when their underwriters looked at the residential application they realised that we were going to own three houses, but neither of the two holiday lets were currently bringing in any income.  They use set figures for each category on their affordability calculator and they took the decision to triple the lines for council tax and utilities (which I could argue is mildly unfair because two of them will be empty, but there you go) and that brought us down on the unaffordable side again while we still have the credit cards.

Of course, Ethel’s isn’t mortgageable yet because (a) it’s still sitting on croft land and (b) it doesn’t have a kitchen or bathroom.  Brian at SGRPID tells me that I should work on three to six months for the sale of the land to complete, and Mick’s taking the first two weeks of July off work so we can blitz the house ready for David to come back and lay the floor and install the kitchen, but the seller is now very nervous about timescales because her decrofting took 14 months and she understandably doesn’t want to wait that long.  I’ve spent the past few days talking to bridging loan companies and brokers, but of the ones that will consider Scotland at all, absolutely none of them will consider a house this far north, so I’m just going to have to cross my fingers and keep hassling the various solicitors.

The other solution would be to pay the cards off, which we could do from savings, but then we wouldn’t have a deposit without mortgaging Ethel’s, so we’re in the same fix.  I did vaguely think about trying to crowdfund paying off the cards by advance selling weeks, but given our quote from the agency was under £15,000 for Ethel’s and we need nearly £50,000, it’s a bit of a non-starter – and I don’t think the agency would be very pleased if I told them all the prime weeks for the next two years were sold!

Finally, we’ve been keeping up with our crofting duties.  Stuart has been up on the hill and cut our peats for us – they look like very ancient library books!

And there are a lot of them.

They’re all laid flat for drying one side now, and when we’ve had a few weeks of sun and wind, we’ll go back up and put them all into a herringbone pattern or stand them up into Stonehenge-type formation to get the other side dry.  They’re pretty big – each slab is about 3 inches thick and just under A3 paper-size.  And they’re HEAVY!

The night before last we got the first big weather-dependent job of the summer done and now have some much cooler ladies 🙂  Just haymaking to go and then I can stop worrying about the forecast for another year.

Inching towards the finishing line

I’ve been tied up with a big project in my day job, so once again work has ground to a halt, but two bits of encouraging news on the financial front:

  1. The residential lender has been in touch to say the credit reports are back, but because I provided the version of an SA302 my accountant’s tax submission software spits out rather than a proper HMRC one, there’s a slight problem with verifying my income.  I can either write to HMRC and request they produce official ones for me (I can’t just print them off the website because that option isn’t available when your self-assessment gets submitted via accountants’ software) or they can forward my application to their head office for one of the senior lending staff to look at it, and they recommend I take the latter option because “referral route may be quicker on the basis that my head office would be happy to agree” – which sounds promising!  They also sent me a list of valuers on their panel to choose from, so fingers crossed we’re nearly there with this.
  2. SGRPID got in touch to say that the Drawings Office would be visiting on 26th June to survey the house site and garden at Ethel’s in order to prepare the sale plans.  This is amazing news because originally I was told it would be about six months, i.e. October/November.  It may actually now turn out that that side of it is ready before I’ve finished the house.

Anyway, all good incentives to carve out some time to get my overalls back on, and the upside of working flat out on something for the past week (to the extent of starting at 6.15am and closing the laptop at nearly midnight for the last two days) is that the invoice covers a very large chunk of what I need to make from the day job each month, so I don’t need to go chasing around for other work too hard for the next three weeks.

Financial frustrations

We’ve been on a bit of a hiatus with Ethel’s as my time has mostly been taken up dealing with mortgage companies.  We’ve hit a snag – our current residential lender has decided it won’t port the mortgage after all.

Truth be told, I’m not terribly surprised.  They’ve been closed for new business for years, have a dwindling number of mortgages on their book, but still have to maintain a staff to deal with us.  When I rang them up to go through the process, they kept having to put me on hold to find someone who could clarify points, because it was so rare that they ever had to do this.  To cut a very long story short, they put all the numbers into their computer, crunched it about a bit and announced that we couldn’t port the mortgage because their system said we couldn’t afford it.

Now, I know things changed in the mortgage market in 2014, but we were on a combined income of about £50,000 when we moved up here and they were completely happy for us to borrow £145,000 interest only, with a monthly payment of £737 because our deal of base rate + 1.1% worked out at about 5.5% at the time.  We’re now on a combined income of about £80,000 plus the estimated rental income (call it £20k after expenses) and they’ve told us that we definitely can’t afford the £115,000 outstanding – in fact, the most they’d be prepared to lend us if we ported the mortgage was….

….wait for it….

£32,500!!!!!!  (And no, I haven’t missed a digit off the front of that!)

It’s down to the credit cards, apparently.  They did say that they’d be happy to lend us the full amount if we would let them take 80% of the value of Ethel’s as security as well, but obviously that doesn’t have a title yet, so nothing they could secure against.

I’m now talking to the lender who’ll be doing the holiday let mortgage to see if their residential arm will take on our residential mortgage, as their commercial arm is happy with the credit card situation, but I fear that we may be stumped until Ethel’s is mortgageable.  I just hope someone doesn’t come along and snap up the other house in the meantime.

She’s making a list, she’s checking it twice…

…and she found she’d left the electrician off it!

Yes, we’ve reached the planning stage.  This is a list (not quite in the right order) of all the stuff we think we have to do to Ethel’s House.

  1. Treat woodworm.
  2. Strip all rooms back to walls.
  3. Repair kitchen ceiling.
  4. Re-wire house.
  5. Enlarge fireplace in living room to take woodburner.
  6. Replace windows.
  7. Replace front door.
  8. Replace roof and all rainwater goods.
  9. Repair chimney.
  10. Enlarge two existing roof lights and add two more.
  11. Insulate all rooms and roof.
  12. Install underfloor heating in kitchen and bathroom.
  13. Install new kitchen.
  14. Install new shower.
  15. Lay solid wood flooring throughout ground floor.
  16. Carpet up the stairs and throughout upstairs landing and bedrooms.
  17. Install woodburner in living room.
  18. Decorate throughout.
  19. Furnish.

Just a bit of work to do, then…  We are really dependent on the electrician and the roofer, as a lot of the rest can’t be done until they’ve finished.  By the time we’ve got it furnished, hopefully the decrofting of the house site will have come through and I’ll be able to get it revalued and apply for a small mortgage to pay off all the money I’ll be borrowing to pay for the list above.  At the moment I have a home report that says it’s worth £77,500.  Compared to other 3-bed near-identical houses in the village currently for sale, that’s very, very low – although all those came to market after the home report was done.  Given there’s a 2-bed bungalow with no land 200 yards up the road that’s been valued at £125,000, I think we should do okay when it comes to getting a good low loan-to-value.

I knew it!!

so I’m half-expecting it to go wrong somewhere!

I am obviously jinxed when it comes to this particular institution!!  On Friday I received a letter from them.

“Dear Mrs J,

We have been unable to verify your signature.  If you still wish to continue with the encashment, please visit a branch or call us on the below number.”

I’m paraphrasing a bit, they sent me a whole side of A4, but basically I think the problem stems from the fact that I was Mrs H when this account was opened and despite me having sent them a request to change my name with accompanying documentation on no less than five separate occasions by recorded delivery (they eventually changed it on the fifth attempt), they hadn’t kept a copy of my new signature.

Fortunately for them, there is a branch in the nearest town, 26 miles away, after they bought a chain of building societies a few years back, otherwise I’d have been driving the 100 miles to Inverness on Saturday morning, swearing all the way (as I had to do three times when the Inverness branch failed to pass on the documentation they’d certified for the change of address the Croydon branch had told me before I moved I could do in writing and didn’t require any certified docs…see why I was nervous?).

That said, they seem to have had a bit of a turnaround in customer service over the past few years (or maybe it’s because they kept on the original building society staff!), but I produced my passport, driving licence, most recent bank statement and, just for good measure, my decree absolute to prove that I used to be married to a man with the surname I’d signed with to open the account, it was all faxed through to the Premium Investments office and I have a fax receipt that says they received it correctly, so fingers crossed.  I might just give them a quick ring tomorrow to make sure, though…

The countdown has begun

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I’ve had a letter from my solicitor!  It enclosed the reply from the seller’s solicitors, several maps and the entries from the Crofting Registers for the two crofts.  I’m not exactly certain why or how, but it seems that because the crofts are still held in Ethel’s name, it makes the paperwork an awful lot simpler and cuts out a lot of the waiting around for the Crofting Commission to approve things.  I think, although I may be wrong, that it essentially now treats me as if Ethel had nominated me to take over the tenancies.

Anyway, my solicitor has asked me to confirm that I’m happy with a few changes they’ve made to the clauses (things like the sellers not being able to warrant that the electricity works properly or there are no contaminants, because they’re the executors and haven’t lived there – usually in Scotland you have 2 weeks after the date of completion to report serious defects to the seller, this will essentially be cancelled) and as long as I am, then all I have to do is deposit the purchase price in my solicitor’s bank account and the other side will start the paperwork – my solicitor will hold the money in escrow until they’ve confirmed the transfer of the tenancies has been completed correctly.

So it’s SHOW ME THE MONEY!! time.  I am paying £95,000 for the two tenancies, so I’ve rung up the financial institution that runs the part of the family trust I’m borrowing the money from to see how much is in there.  This makes me sound like a total rich kid – I’m not, my father died when I was relatively young and his investments were put into a trust fund to provide an income for my mother for the rest of her life and capital growth for me and my half-brother to inherit after she dies.  For one reason or another, it’s split between two financial institutions and the bit I’m borrowing hasn’t been paying Mum an income for a number of years now, so my brother and I, as the trustees, decided that the trust would be better off loaning me the money to do this and I’ll pay Mum an income off it at a rate of base rate + 3%.

They told me that there was £91,500 in there and all we needed to do was write to them to confirm that we wanted to liquidate it (1% fee for liquidating it) and close the account.  They’ll also take a pro rata amount out for the quarterly management charge, so I’m expecting to get around £90,000 transferred into my bank account early next week, though this is a bank not renowned for its customer service skills, so I’m half-expecting it to go wrong somewhere!  The remaining £5,000 will either come out of my savings or Mum will add to it from her Premium Bonds so she gets the monthly amount she’s expecting in income.

Money, money, money…

ABBA had it right; it ain’t funny, especially when you’re trying to raise it against an unmortgageable property.

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I will hold my hands up here and say that I’ve been EXCEPTIONALLY lucky and am borrowing the money to buy the croft from family, although I’ll be paying interest on it at base rate plus 3%.  That covers the purchase price and my savings will cover the solicitors’ fees and some of the work that needs doing, but by no means all of it.

So what am I doing about the rest?  Well, it’s a bit of a risk and could all go horribly wrong, but I have a clean credit record and four credit cards with high limits that keep sending me 0% cash and balance transfer offers.  So I’m planning to put the work on the cards and hope that I can get it done up and the issue that prevents the house being mortgageable sorted before the 0% period runs out, then apply for a mortgage to pay back the cards and the bulk of the family loan (although the family is happy to let the loan run for a while if mortgage rates start doing silly things).

As it happens, I had a bit of luck last week regarding finances.  I’m self-employed and one of the companies I freelance for offered me a guaranteed 20 hours a week.  Initially I was going to turn it down, as it’s less money than I usually charge per hour and they wanted me to work 6am until 10am every weekday.  Then I thought about it, decided that I was being a totally spoilt princess and if the universe was going to drop over half of what I need to earn each month into my lap in return for the alarm clock going off half an hour earlier than it does anyway for my husband to get up, it would be extremely ungracious of me to turn it down.  Guaranteed income means less time spent drumming up new business and these guys pay promptly and never need chasing.  The rest of what I need to earn each month will be easily covered by my other regular clients and shouldn’t take up more than 8-10 hours a week, meaning I’ll be able to block out periods of time to work on the house. I start tomorrow, wish me luck!

Buying a croft

When is a house not a house?  When it’s a croft.

Technically, when I say I’ve had an offer verbally accepted on a house, that’s not strictly true.  I am, in fact, buying two croft tenancies, one of which happens to have a house on it.  Many crofting tenants have bought out their tenancies and become owner-occupier crofters, these two still remain as tenancies and the house site has not been decrofted, so the Scottish Ministers own the land and, assuming that I’m considered a suitable person to be assigned the tenancies, I will have to pay them rent for the crofts until I can buy them out.  The buy-out figure is usually 15 times the annual tenancy (which will not be huge – to give you an idea, the 3.12 acres that go with the house we currently live in was bought out by the previous owner for under £100) but once you’ve become an owner-occupier, if you sell the land on within ten years (recently increased from five years), you have to pay half the difference between the amount you paid and the current value back to the landlord.

It’s all a bit of a legal minefield and having a solicitor who understands crofting law is absolutely essential.  The formal offer that went in for these two tenancies ran to 23 clauses on top of the Scottish Standard Clauses and includes things that wouldn’t have crossed my mind, such as ensuring the crofts are sold “together with the whole permanent improvements, including the dwellinghouse” (it would be a shame to pay all that money and find they’ve bulldozed the place…), that “it is an essential condition of this offer that the Crofting Commission consents to the assignation of the tenancies” (it would also be a shame to pay all that money and not be able to do anything with the place) and various other clauses that ensure I don’t get stuck with any very large bills or long-lost claimants to the tenancies popping out of the woodwork.

The other big stumbling block is because the purchaser of the tenancies doesn’t own the ground the house sits on, it’s completely unmortgageable.  Even the bridging loan companies I rang wouldn’t touch it (not enough equity in our current house to back it up).  One absolute right a crofting tenant has, however, is to buy the house site from the landlord and have it decrofted – usually an area of 0.2-0.5 acres is permitted to be taken out of crofting tenure to give some garden space as well.  This then makes the house suitable for mortgage lending purposes. I’ll talk about finances in another post – I will be completely transparent about money on this blog – but I’m in the very fortunate position of being able to borrow money from family to make the initial purchase, on which we’ve agreed I’ll pay interest of Bank of England base rate plus 3%.

One of the conditions of the Crofting Commission thinking me a suitable person to be assigned the tenancies is that I work the crofts.  So I’m not only taking on a renovation project, I’m taking on just under 10 acres of fields, which means I’m going to be learning to keep sheep and make hay as well.  Never a dull moment!