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Is Taking a Mortgage the WORST Decision Ever??
Rank: Elder Joined: 7/11/2010 Posts: 5,040
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bengraham wrote:Real Estate Woes-the secret lives of house poor canadians
http://www.cbc.ca/news/b...poor-canadians-1.3086793
Could this phenomenon also be at play in our Kenyan scenario? i.e. Kenyans with mortgages for their "dream" homes that are costing them every drop of blood and hence they cannot afford unexpected shocks like an increase in expenses or increase in interest rates. Could it be that some of the nairobians living in leafy suburbs in 15m shilling apartments and the like are really living the secret lives of the house poor?
Considering that this is happening in a country with low mortgage rates, we can conclude that this is happening to majority of the mortgage holders in our country. With the average incomes and the high rates that can be the most likely outcome.
The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Elder Joined: 7/23/2008 Posts: 3,017
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Mortgage owners must be shitting their pants now. But its for a short time. things return to normal after the tight liquidity market is alleviated.
For a mortgage, as long as the interest component of the monthly payment is below the rent, then you are good as like rental outflows, you will never recover them. Payments to capital component are equivalent to savings "The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins
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Rank: User Joined: 8/15/2013 Posts: 13,237 Location: Vacuum
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Obi 1 Kanobi wrote:Mortgage owners must be shitting their pants now. But its for a short time. things return to normal after the tight liquidity market is alleviated.
For a mortgage, as long as the interest component of the monthly payment is below the rent, then you are good as like rental outflows, you will never recover them. Payments to capital component are equivalent to savings
In which part of this country or bank does this happen?
If Obiero did it, Who Am I?
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Rank: Elder Joined: 6/23/2009 Posts: 14,321 Location: nairobi
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Swenani wrote:Obi 1 Kanobi wrote:Mortgage owners must be shitting their pants now. But its for a short time. things return to normal after the tight liquidity market is alleviated.
For a mortgage, as long as the interest component of the monthly payment is below the rent, then you are good as like rental outflows, you will never recover them. Payments to capital component are equivalent to savings
In which part of this country or bank does this happen?
This thinking is lopsided and weird. When paying the interest you are doing it with hope of owning the property at some point, while rental outflows aid the dream of the landlord! COOP, IMH, KEGN, KQ, MTNU
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Rank: New-farer Joined: 10/28/2015 Posts: 47
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heri wrote:How can i get info on how various banks compare in terms of the rates they are offering for mortgages /loans?
Is that info available anywhere other than calling each bank?
I totally share this frustration, and sometimes wonder if keeping this info hard-to-find is part of how they make money 
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Rank: Member Joined: 1/22/2015 Posts: 682
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bengraham wrote:Real Estate Woes-the secret lives of house poor canadians
http://www.cbc.ca/news/b...poor-canadians-1.3086793
Could this phenomenon also be at play in our Kenyan scenario? i.e. Kenyans with mortgages for their "dream" homes that are costing them every drop of blood and hence they cannot afford unexpected shocks like an increase in expenses or increase in interest rates. Could it be that some of the nairobians living in leafy suburbs in 15m shilling apartments and the like are really living the secret lives of the house poor?
Not only the apartments. Even many of the people living in mansions in Runda and the likes, built with cash are house poor. Nyumba ni expensive. Most people break bank to get one
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Rank: Member Joined: 6/17/2011 Posts: 129 Location: Nairobi
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I took a Kshs 7 Million 15 year plot purchase and construction loan from Kuscco Housing Fund in Jan 2010 at a fixed interest rate of 14% and constructed a 4 br maisonette+SQ within 12 kms of CBD. I was not going to sit and wait for the loan to run the full tenor as I was scared of the interest payments, so I had to make lumpsum prepayments of whatever amounts even 100k.
I just cleared it last month and in total, I have paid slightly over 10 m over the 6 year period. The current selling price of the house is about 14 M. Who says a mortage does not make sense? Just ensure you look for the right financier who will not hike rates any howly and ensure you prepay as much as you can. As long as you're going to be thinking anyway, think big
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Rank: Elder Joined: 3/2/2009 Posts: 26,331 Location: Masada
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TPK wrote:I took a Kshs 7 Million 15 year plot purchase and construction loan from Kuscco Housing Fund in Jan 2010 at a fixed interest rate of 14% and constructed a 4 br maisonette+SQ within 12 kms of CBD. I was not going to sit and wait for the loan to run the full tenor as I was scared of the interest payments, so I had to make lumpsum prepayments of whatever amounts even 100k.
I just cleared it last month and in total, I have paid slightly over 10 m over the 6 year period. The current selling price of the house is about 14 M. Who says a mortage does not make sense? Just ensure you look for the right financier who will not hike rates any howly and ensure you prepay as much as you can.
Did you take a 15 year Loan or a 15 year Mortgage?
Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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Rank: Elder Joined: 12/17/2009 Posts: 3,583 Location: Kenya
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TPK wrote:I took a Kshs 7 Million 15 year plot purchase and construction loan from Kuscco Housing Fund in Jan 2010 at a fixed interest rate of 14% and constructed a 4 br maisonette+SQ within 12 kms of CBD. I was not going to sit and wait for the loan to run the full tenor as I was scared of the interest payments, so I had to make lumpsum prepayments of whatever amounts even 100k.
I just cleared it last month and in total, I have paid slightly over 10 m over the 6 year period. The current selling price of the house is about 14 M. Who says a mortage does not make sense? Just ensure you look for the right financier who will not hike rates any howly and ensure you prepay as much as you can.
Must have been a very good a deal you got, 12km from cbd, and only 7m for plot and putting up a 4br + sq
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Rank: Elder Joined: 6/2/2011 Posts: 4,824 Location: -1.2107, 36.8831
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TPK wrote:I took a Kshs 7 Million 15 year plot purchase and construction loan from Kuscco Housing Fund in Jan 2010 at a fixed interest rate of 14% and constructed a 4 br maisonette+SQ within 12 kms of CBD. I was not going to sit and wait for the loan to run the full tenor as I was scared of the interest payments, so I had to make lumpsum prepayments of whatever amounts even 100k.
I just cleared it last month and in total, I have paid slightly over 10 m over the 6 year period. The current selling price of the house is about 14 M. Who says a mortage does not make sense? Just ensure you look for the right financier who will not hike rates any howly and ensure you prepay as much as you can.
So, Interest rate is 14% p.a. Principal is KShs. 7,000,000.00 and repayment period is 15 years (or 180 months).
From simple calculation, you are supposed to pay KShs. 93,221.90 every month for 15 years.
When you pay "LUMP SUMS" of KShs. 100,000.00 monthly, you are actually doing nothing.
Receive with simplicity everything that happens to you.” ― Rashi
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Is Taking a Mortgage the WORST Decision Ever??
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