What do you guys think about this product from HF?

I'm seriously considering it and could really use your thoughts and advice on this one. I'm thinking about it because I might be too busy and may be even naive to supervise the construction of a house. The interest rate they're giving me is at 15% on reducing.
Many years ago my father took a mortgage with them and it was a nightmare as they were running a scam.

http://www.housing.co.ke...ao&subcat=mortprods

The best time to plant a tree is twenty years ago. The second best time is now.

I thought about it but decided not to.

Ok - i haven't tried this out so don't take it as gospel truth.

Supposing you put aside that 54k for 10 years.... - that comes to 6.48M excluding interest. (You could also be doing T Bills/ some low risk investments with this cash) and realistically could have 8M)

If you through in a monthly rent of say an average of 40k a month for 10 years - you have a total of 4.8M going towards rent.
So,yes you'd have spent 4.8M on rented housing,but you'd possibly have 8M available to you to buy - FOR CASH - your house.

However of course there's the risk that your 4M house would not be worth 8M after 10 years.


Makao however assumes that you already have your piece of land,and just need to develop it. So possibly after maybe 3 years (when you have saved just under 2M) you could buy a few plots,some for speculation - and I'm sure they'd be worth much more when you are ready to build,buy.

Putting aside a steady figure every month assumes a few things of course:

- you will have a steady source of income over the duration
- you have the discipline to forego some things
- your low risk investments will be enough to cope with the effective inflation rate.

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Another option is to do the mortgage but pay large lump sums as soon as you possibly can. So maybe take a 20 year mortgage but try and pay it off within 10 years.

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Disclaimer - I'm no financial expert :) but I read.

In real estate,the trick is accumulation and getting in at the earliest opportunity. I guess this applies to all life issues such as getting education,starting a family etc.

I assume you have the land but not enough cash to build. Besides,you have no time/expertise to build yourself.

A mortgage is desirable than savings cause the repayments are not tied to inflation. For example,if your repayment is 50K a month now,the repayment will be the same 20 yrs down the line,irrespective of the inflation rate. The value of the property will have risen. Even if you end up paying 13M,the property will probably be worth much more than that. In any case,you may be to repay the mortgage faster by making lumpsum payments from time to time.

HF has changed alot over the years mainly due to stiff competition from S&L (top dog in mortgage but have no 'Makao' type product) and banks. HF are normally not very upfront with all the details which evntually come to haunt borrowers. I would recommend you exercise due diligence particularly on the construction costs and most importantly,the monthly mortgage repayment calculation. This is where they rip where they did not sow. The fine print called 'terms and conditions' should also be thoroughly examined.

If satisfied,please go for it.

reithi

A NO-NO for me... I find paying someone 50k for 20 years a bit ridiculous,too much money in a very long period,plus if anything happens & am unable to pay they take the house & I don’t think if I’d get a refund.



I decided to go tuvok way 2 years ago & I see maself in my dream home in 5yrs time,God willing.



But that just Bree…

@mtaalam what cut ?