Hi fellow wazuans,

Just wondering coz I have never seen a post to do with mortgages.
Since this is a smart people's forum, please advise on how one can make mortgages work for them.
I am pretty young. would it be wise for me to take out a mortgage?
What are the major considerations I should take into account?

The best thing with a mortgage is that interest rate for the mortgage is lower than the rate at which the value of the house increases. After some years as you continue to re-pay your mortgage, you will realize that the property is valued much more than your mortgage. At such a point if your financial institution can agree,(which most of them do depending on their terms and conditions) you can then sell the house, clear your mortgage and pocket the gains. Compare the financial institutions that offer mortgages and pick the best. Visit these institutions and they will be happy to take you through step by step and answer all your questions. Make sure you read and understand their terms and conditions for the mortgage before you sign on the dotted line.If you qualify for a mortgage and you have identified a property in a good location ( where the prices are rising )then a mortgage can be a nice deal and can work for you.

Avoid a mortgage like the plague..they are just too expensive in Kenya... How do you pay 15-17% for 10 years!!! my advice is be a disciplined saver and start investing small with your savings...look around carefully how you can build build an income stream at minimal cost e.g.low cost houses for rent, without having to take a loan...I know places where guys are investing in plots worth 600k, they construct 22 single units without a slab on the plot at a cost of 1.8m. Each is rented for 2k. 44k per month is not bad for 2.4m investment. Key as I said is save save save.....so you can raise the initial capital.[/quote]

where can i get those plots?

Speaking from an investment point of view (strictly), buying a house is the worst form of investment, very low rate of return - normally less than your cost of finance.

As an asset, it could pass.. so know that you are taking a mortgage for an asset, not as an investment.

I agree with you speaking strictly a house to live in might not be a a good investment.

But unstrictly speaking on investment the value of staying in your own home is not easy to quantify financially. For example I would hypothesize that getting a mortgage to buy your live in house can increase your drive and functionality. The prospect of failing to meet your obligation and your family being kicked out will make you worker harder think faster and smarter etc ....... how would you quantify that in monetary terms??

Either way a mortgage is a good idea, you reduce you tax, the insurance with your mortgage will pay for your house upon your untimely demise, it is a form of saving etc etc!!!