Rebirth: Seven Years in a Great Dream

Chapter 24: Home Equity Loan

The house is way too big! Mu Dong and Xiao Xiao’s budget was 80 to 100 square meters, costing 400,000 to 500,000. This house, with three bedrooms, two living rooms, and two bathrooms, spans 120 square meters. Then there was the price. After spending two days looking at resale properties, they’d found that prices were generally below 5,000 yuan per square meter. For this house, the seller was asking 5,500 yuan per square meter—and demanded cash! The reason was that a fully renovated home was worth that price. Seeing how delighted Xiao Xiao looked, Mu Dong secretly decided he absolutely had to buy this apartment. Mu Dong also really liked this apartment; he was very satisfied with the location, the neighborhood environment, and the interior finishes. Moreover, this apartment met all of Xiao Xiao’s expectations for a home. Living at the foot of the mountain—opening the window reveals Wanfeng Mountain. You can hear birds singing—Wanfeng Mountain Park is right across the street. Not to mention, he knew that property prices would rise quickly; by March of next year, this apartment wouldn’t even be available for 8,000 yuan per square meter. Mu Dong pondered the matter anxiously. First: He was definitely going to buy the house—there was no question about that. Second: He must do his best to persuade the seller to accept a mortgage. From the seller’s perspective, whether it’s cash or a mortgage, the only difference is that cash is faster and involves simpler paperwork—but the total price remains the same. With a mortgage, it would take about a month longer to pay off the balance. Third, if a mortgage isn’t possible, he’ll pay in full. If that really doesn’t work, he’ll use the portion of the Agricultural Bank loan from his yard’s funds to buy the house. There’s nothing wrong with doing it this way—it simply means the yard will have slightly less capital, and future profits will decrease accordingly, but it won’t affect the returns of the other investors. Mu Dong made up his mind. He squeezed Xiao Xiao’s hand tightly and whispered in her ear, “Honey, don’t worry. I’ve got your back. I’ll definitely buy this house for you.” With that, he turned to the homeowner and said, “Sir, let’s have a word.” The two entered a room that looked like a study. Mu Dong handed the homeowner a cigarette, lit it for him, and lit one for himself. He began, “Sir, how old are you this year?” The old man replied, “I’m 60 in the lunar calendar—born in the Year of the Ox. I’ve worked hard my whole life.” Mu Dong said, “You certainly don’t look it. My father is 53 this year—he’s from the countryside, but he looks much older than you.” He decided to start with a little flattery to break the ice. The old man said, “Are you from the countryside too, young man? That’s no easy feat. To have the means to buy a house at your age—you must have worked very hard.” Mu Dong replied, “It’s not like I’m well-off—I just scraped together what I could. I don’t have much money. So, I was hoping you could do me a favor and give me a few extra days. We’re planning to take out a mortgage—would that be okay?” The old man asked, “That young lady is your fiancée, right? Are you buying this house to get married?” Mu Dong replied, “Yeah, that’s exactly what it’s for—getting married. We’re still young and working our way up. Old man, please help me out and give me a few more days…” The old man sighed and said, “Young man, every family has its own set of problems. I’ll be honest with you. My son met a girlfriend from Shanghai when he was in college. He got carried away and insisted on moving to Shanghai to make a career for himself—wasn’t he just chasing after that girl from Shanghai? There’s nothing I can do; the kid’s grown up, and I can’t control him anymore. Besides, there are definitely more job opportunities in Shanghai than in Quancheng, and the pay is better—though housing prices are even higher there. So, out of necessity, I had to sell this place to buy him a home in Shanghai. Even that isn’t enough; I’m still short quite a bit of money.” After saying this, he let out a heavy sigh, took a drag on his cigarette, and continued, “We’ve pretty much finished looking at apartments in Shanghai, and they’re in a hurry to close the deal, so I really need the full payment right away. Young man, please bear with me. If it really doesn’t work out, you can look at other properties. You’ve just started your careers—it’s not easy for you either.” Mu Dong knew it was a lost cause. After a moment’s thought, Mu Dong asked, “Sir, if I were to pay in full, could you give me a discount on this house?” The old man looked a bit surprised and said, “Paying in full would cost over 600,000, young man.” Mu Dong replied, “I’ll see what I can do to scrape it together. Give me three days—if I can’t come up with the money by then, I’ll just let it go.” The old man said, “Three days it is. If you pay in full, I’ll knock 100 yuan off the price per square meter, and I’ll throw in all the furniture and appliances in the house for free. How does that sound?” 100 yuan per square meter—for a 120-square-meter apartment, that’s 12,000 yuan. The furniture and appliances are surely worth at least 10,000 to 20,000 yuan. That’s a pretty generous offer. The old man was getting anxious too. The house had been on the market for seven or eight days—people kept coming to look but no one was buying. Whenever he asked, the first question was always whether a mortgage was available, and his son in Shanghai was nagging him over and over. So, he gritted his teeth and decided to make a concession. Mu Dong said, “Thank you, sir. Here’s what we’ll do: I’ll give you a 10,000 yuan deposit. Hold this place for me for three days. If I don’t show up within three days, I’ll forfeit the 10,000 yuan—it’s yours to keep.” Mu Dong had to buy this house, so he needed to secure it in advance. The old man didn’t stand on ceremony; he took the money and said, “All right, it’s a deal. I’ll write you a receipt.” With that, he fetched a pen and paper, confirmed Mu Dong’s name, and quickly scribbled out the receipt. “I hereby acknowledge receipt of a deposit of 10,000 yuan in full from Mu Dong for the purchase of Apartment 301, Unit 2, Building 10, Telecom Residential Complex, No. xx, xxx Road. Valid until October 22, 2008; non-refundable after expiration. Recipient: Ji xx. Date: October 19, 2008.” Taking the receipt and looking at the words “deposit” on it, Mu Dong thought to himself, This old man really knows his stuff. Seeing Mu Dong put the receipt away, the old man added, “Young Mu, today doesn’t count. I’ll wait three days for you—until Wednesday at the latest. If you don’t show up, I’ll really have pocketed that 10,000 yuan.” Mu Dong replied, “Don’t say that. I’ll do my best to let you make even more.” The two of them chuckled. The old man continued, “There’s one more thing. The ground floor of this building comes with garages. I have one myself—5. 5 meters long, 3 meters wide, 16. 5 square meters. The price is 6,000 per square meter, which comes to 99,000. This garage has a ceiling height of 2. 3 meters and comes with its own property deed. If you want it, you’ll get first dibs. If you don’t want it, there’s a homeowner in the complex who’s interested in buying it, so I’ll just sell it to him.” Mu Dong thought to himself: Of course I want it! I was just about to ask you about it—I saw the garage downstairs earlier, but since you didn’t mention it, I assumed your family hadn’t bought one before. But he looked a bit hesitant: “Uncle Ji, I really want it, but I’m a bit short on cash. Could you knock a little off the price?” The old man thought for a moment and said, “95,000. Any lower, and I won’t sell it to you.” Well, that saves another 4,000. Mu Dong said, “All right then. I’ll take the garage too—that’s another 90,000 or so.” With everything settled, the two emerged from the study, and Mu Dong took his leave. As he walked downstairs, Mu Dong said to Xiao Xiao, “The seller needs the money urgently and won’t accept a mortgage. We’ll have to figure something else out.” Mu Dong had made up his mind: even if it meant tapping into the yard’s funds, he was going to buy this house that both Xiao Xiao and he loved. A house like this—once missed, it would be very hard to find another one. Just then, the young real estate agent suddenly chimed in, “Brother Mu, actually, this isn’t that hard to handle. Our company can help you work it out.” The young man’s surname was Wang. Mu Dong was a bit puzzled: “Wang, how exactly can your company help me?” Wang replied, “Our company can purchase this house outright at the current price first, and then sell it to you on a mortgage. Rest assured, we won’t mark up the price—we’ll only charge interest on the funds we provide during the term of your mortgage.” Mu Dong said, “That’s actually a good solution. How much interest does your company charge?” Young Wang replied, “We charge 1. 5% of the full purchase price. Assuming your house is worth 600,000, we’d charge 9,000, and this fee applies until your mortgage paperwork is finalized.” Mu Dong thought to himself, “That’s quite a bit.” Since he’d already decided to buy the house outright, he didn’t pay much attention to it. He remarked casually, “Your company really does have a wide range of services. I thought you were just a real estate agency.” Xiao Wang sounded a bit excited: “That’s right, we handle a lot of different services—real estate brokerage, mortgage processing, home equity loans… we do it all…” Home equity loans!!! Mu Dong’s mind suddenly went into overdrive. Mu Dong felt as if a wide, spacious door had suddenly opened before him, and the world instantly became vast and bright! Yes, home equity loans—how could I not have thought of that! All my problems were completely solved in that very moment! Mu Dong looked at Xiao Wang and thought to himself, “Bro, you really are my lucky charm.” Mu Dong’s spirits lifted, and he asked Xiao Wang, “Aren’t home equity loans handled by banks? How come you guys can do them too?” Xiao Wang replied, “Banks have a lot of red tape and take a long time, plus they restrict how the loan can be used. Many business owners need working capital, and to get the funds as quickly as possible, they come to us. Strictly speaking, what we offer should actually be called a home equity loan—it’s very fast, with same-day disbursement.” Mu Dong chuckled, “Then your interest rates must be high.” Xiao Wang replied, “The bank’s interest rate for a one-year loan is 7 percent; ours is 10 percent—just a little higher. This falls under legal private lending rates and is protected by law.” Mu Dong said, “Since you’re making it sound so appealing, if I ever need a mortgage loan in the future, I’ll come to you.” Xiao Xiao and Xiao Wang were puzzled—they’d been talking about buying a house with a mortgage, so how did the conversation veer off to secured loans? Mu Dong’s original plan had always been to buy a house with a mortgage, then set aside a portion of his lottery winnings to invest in the storage yard to earn a profit. This line of thinking wasn’t necessarily wrong, but it overlooked the return on investment from the storage yard. After all, the yard’s profits over the next few months were set to at least double. This raises the issue of capital efficiency. If he buys a house, he can’t use the funds for the storage yard; if he uses them for the storage yard, he can’t buy a house. Now, a home mortgage perfectly solves this dilemma. Mu Dong can reallocate funds to pay for this house in full. He can then take out a mortgage on the property—say, for 600,000. This 600,000 can be immediately invested in the yard’s operations; in a few months, it could grow to 1. 2 million or even more. A 10% interest rate on the loan is a truly excellent deal compared to an expected return of more than double that amount. Mu Dong was over the moon. He didn’t even bother looking at the other houses. He parted ways with Xiao Wang and headed straight home. On the way home, Mu Dong briefly explained the process to Xiao Xiao. Xiao Xiao found it a bit confusing at first, but eventually got the gist of it. Xiao Xiao unconditionally supported Mu Dong’s decision. She added that she had about 25,000, 10,000 of which was her dowry. “All right, let’s put that 25,000 to use too,” Mu Dong thought to himself. “That way, Xiao Xiao will feel a sense of accomplishment.” The down payment, plus the garage, plus the realtor’s fee, plus various taxes and fees—Mu Dong did the math and came up with a total of just over 760,000. Let’s round it up to 770,000. He currently had 625,000 on hand, leaving a shortfall of 145,000. “I’ll just have my sister transfer 150,000 over,” Mu Dong thought. To save himself the trouble, he’d gradually transferred all his funds to that Agricultural Bank of China account in town, and when he left, he’d handed all his bank cards over to his sister, Mu Xiaoxia. Now, Mu Dong couldn’t help but reflect: you really shouldn’t put all your eggs in one basket. After thinking it over, he realized something wasn’t right: for such a large sum, transferring it from his personal account would likely require his physical presence. He did the math—there was still one train leaving tonight, departing in the early hours of the morning and arriving in Southern Shandong by dawn. He decided he’d better make the trip back to avoid any complications. Mu Dong told Xiao Xiao that he needed to return to Southern Shandong to arrange the funds. Since Xiao Xiao had classes tomorrow, she naturally didn’t have time to go back with him. The two went to a nearby train ticket agency and bought their tickets, securing return tickets at the same time. They’d head back tonight, arrive early tomorrow morning, complete the transfer before noon, and return from Southern Shandong in the afternoon. They’d arrive in Quancheng tomorrow night, and the day after—Tuesday—Mu Dong asked Xiao Xiao to see if she could reschedule her classes so they could go house hunting together. After buying the tickets, the two went to Hehua Street for dinner. Then they returned home. With the train leaving at 11:00 p. m. , they had plenty of time to spend some tender moments together. At 10:00 p. m. , Xiao Xiao fell asleep. Mu Dong carefully locked the door and headed to the station. This time they’d booked a sleeper car, so he’d have a good chance to take advantage of the situation. The train was not very crowded late at night, and Mu Dong, who had been busy all day, quickly drifted off to sleep as the train rocked gently. At 4:00 a. m. , Mu Dong was woken up by a conductor to exchange his ticket and exit the station; it wasn’t even dawn yet. Mu Dong found a small hotel near the station and slept for a little over two hours. After daybreak, he hired a taxi, agreeing to rent it for the entire day and return in the afternoon, then headed straight back to the Mu Family Yard. At the Mu Family Yard, the day’s work was just getting underway. When Mu Daguo saw Mu Dong getting out of the taxi, he ran over excitedly and shouted, “Big Brother, you’re back!” Mu Dong happily patted Mu Daguo on the shoulder and said, “I’m back, Daguo. You’ve been working hard lately.” Then he waved his hand and said to the few people who had gathered around, “Everyone, you’ve all worked hard while I was away. Thank you all.” Hearing the commotion, Mu’s parents came out. After asking if Mu Dong had eaten breakfast yet, they took him and the taxi driver out for breakfast. After breakfast, Mu Dong called over Mu Daguo and Mu Xiaoxia to ask about the situation at the storage yard. Everything was running smoothly there, and all the relevant data had been communicated to Mu Dong over the phone. Mu Dong was very satisfied. He told Mu Daguo to get back to work, then discussed the money matter with his sister. The two of them then went together to the Agricultural Bank of China branch in town. Although there were a few people in line, Mr. Mu’s business took priority. A few minutes later, Mu Dong had transferred 150,000 yuan into Quancheng’s account. The two quickly returned to the storage yard. During the morning, Mu Dong walked around the site. The overall situation was indeed as Mu Daguo had described—there were no issues. Since opening on September 11, the yard had been in operation for over a month, and nearly half of the land was already piled high with sand mounds about 10 meters tall. Huh, that’s right—it’s been over a month. I don’t think I’ve paid the workers yet. Some of them have been working since the preparation phase; it’s been a month and a half already. Time is tight on this trip, so I won’t have time to handle it now. After I buy the house, I’ll come back right away to figure out how to pay them and get their wages out as soon as possible. Actually, the people at the yard don’t really have a clear idea about pay. In rural areas, it’s quite common to get paid once every few months—some even get paid only once a year. During lunch, Boss Mu gathered the workers and held a brief meeting, during which he mainly addressed three issues. First, workplace safety. With so many vehicles and pieces of equipment at the stockpile site now, safety issues cannot be overlooked Second, regarding operations on the sand pile: as the pile grows taller, there is a risk of landslides and collapses. Therefore, the side closest to the work area must be a gentle slope; only in areas farther from the work area may conveyor belts be used to build up the height, creating a steep slope Third, since wages have not been paid for quite some time, a lump-sum payment will be issued in early November. Anyone with an urgent family matter requiring funds may ask Mu Xiaoxia for an advance, which will be deducted from next month’s paycheck. The maximum advance amount is 2,000 yuan. After covering these three matters, it was time for lunch. Mu Dong ate with everyone as well; he enjoyed this atmosphere and found it very reassuring. The workers also liked eating with their boss, finding him easygoing and down-to-earth. After lunch, Mu Dong walked around the yard for a while. At 2:00 p. m. , he left the yard and took a bus back to Southern Shandong. At 3:00 p. m. , Mu Dong boarded the train. He arrived in Quancheng at 7:30 p. m. Xiao Xiao knew which train Mu Dong was taking, so she met him at the station. Mu Dong clasped her cool little hand and said gently, “Didn’t I tell you to wait at home? You must have been anxious waiting, right? You haven’t eaten yet, have you? Come on, let’s find a place to eat right away.” Xiao Xiao said nothing, letting Mu Dong lead her as she rested her head on his shoulder. The two of them boarded the bus together. At the pork rib and rice restaurant downstairs from their apartment complex—affordable and reasonably priced—the two ate in silence before heading home. Xiao Xiao had been feeling a bit confused and a bit ashamed lately. She found herself constantly wanting to get close to Mu Dong—what was wrong with her? Mu Dong had only been gone for a day, yet her heart felt as if it were being torn apart. She wondered, “Does Mu Dong think I’m promiscuous?” With these thoughts weighing on her mind, Xiao Xiao felt a vague sense of resistance tonight, and her movements were stiff. Mu Dong noticed this and asked softly, “Honey, what’s wrong? Are you feeling unwell?” After repeated questioning, Xiao Xiao hesitantly voiced her concerns. Mu Dong burst out laughing. “Honey, food and sex—it’s only human nature.” Then he gently stroked Xiao Xiao’s face and whispered, “Honey, this just shows we have a strong foundation in our relationship—we’re mutually in love. You cherish me, and I treasure you. Come on, let me keep cherishing you.” Xiao Xiao felt as if she had turned back into a water plant, bobbing up and down with the tide. When the storm had passed, Xiao Xiao wrapped her arms around Mu Dong and asked, “Will you still buy lottery tickets in the future?” Mu Dong replied, “I’ll make an occasional charitable contribution, but I won’t buy them back-to-back. Good luck is limited—we have to use it sparingly.” Xiao Xiao felt relieved. She’d been worried these past few days that Mu Dong would get carried away by winning the lottery and start buying tickets like crazy. There were too many stories like that in the newspapers and on TV—people who won a small prize, went on a spending spree, and ended up in massive debt. Having received the answer she wanted, Xiao Xiao felt completely satisfied. With that weight lifted from her mind, she felt a wave of relief wash over her, and she soon drifted off to sleep. Mu Dong gazed at Xiao Xiao’s young, beautiful face and couldn’t help but sigh. “Silly girl,” he thought. “Always worrying about me.”