Wazua
»
Investor
»
Property
»
Is Taking a Mortgage the WORST Decision Ever??
Rank: Elder Joined: 7/22/2009 Posts: 7,455
|
DBLyon wrote:itz wrote:MaichBlack wrote:alma1 wrote:And the bubble officially begins. Suraya have been forced to reduce the asking prices of their houses. And now they have to deal with higher financing costs!!! Ni kubaya!!! @MaichBlack which Suraya houses have lowered asking price? I'm also waiting with bated breath to hear this. Their Apartments at fourways junction - The prices were reduced ridiculously! Approximately 30%!!! Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
|
|
|
Rank: Elder Joined: 12/25/2014 Posts: 2,300 Location: kenya
|
I realised that mortgages in usa is 2.97% with so many government tax breaks. Well here at home the mortgage is at least 17% almost 6 times .tell me how can we encourage ownerships of homes with those exuberant rates and no government backed subsidies ???
|
|
|
Rank: Elder Joined: 9/15/2006 Posts: 3,905
|
enyands wrote:I realised that mortgages in usa is 2.97% with so many government tax breaks. Well here at home the mortgage is at least 17% almost 6 times .tell me how can we encourage ownerships of homes with those exuberant rates and no government backed subsidies ??? In the US, low interest rates and home prices knocked down from the housing crisis have made buying a much better deal than renting in virtually all U.S. markets.
|
|
|
Rank: Member Joined: 9/14/2011 Posts: 834 Location: nairobi
|
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?
|
|
|
Rank: Elder Joined: 7/22/2009 Posts: 7,455
|
#308 Posted : Saturday, June 28, 2014 9:56:57 AM I warned guys last year but others gave them theoretical/text book advice! Now the sh!t has hit the fan as I had warned!!! I was talking about 25% but the rates are now higher than that. You had been warned!!! ChumsQuest wrote:MaichBlack wrote:omhangla wrote:There are these arpatments; Milimani excutive arpatments (Hazina close) build by NSSF. 34 million for 3 bedroom. is it a fair deal This is exactly what I was saying!!! 34 million for a fourth floor house. And this is NSSF which is supposed to be "cheaper" than the other sharks!!! If you were to pay for this house using a 20 year mortgage [at 16% interest], it would cost you Kshs. 473,027/= every month!!! Kshs. 473,027/= per month for the next 20 years [hoping the rates don't go up!!!] during those 20 years!!! If it hits 25% like it did a couple of years ago, your monthly payments go up to Kshs. 713,393.52/=!! For a three bedroom apartment!!! And then some fellows will tell you you can accelerate payments!!! To what??? A million a month maybe?? And what business are you in??  This is now ridiculous!!! Ati 34m for a 3 bed...Kenyans have lost their mind. This is where the street con-men have relocated = real estate..  Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
|
|
|
Rank: Veteran Joined: 4/16/2014 Posts: 1,420 Location: Bohemian Grove
|
MaichBlack wrote:#308 Posted : Saturday, June 28, 2014 9:56:57 AM I warned guys last year but others gave them theoretical/text book advice! Now the sh!t has hit the fan as I had warned!!! I was talking about 25% but the rates are now higher than that. You had been warned!!! ChumsQuest wrote:MaichBlack wrote:omhangla wrote:There are these arpatments; Milimani excutive arpatments (Hazina close) build by NSSF. 34 million for 3 bedroom. is it a fair deal This is exactly what I was saying!!! 34 million for a fourth floor house. And this is NSSF which is supposed to be "cheaper" than the other sharks!!! If you were to pay for this house using a 20 year mortgage [at 16% interest], it would cost you Kshs. 473,027/= every month!!! Kshs. 473,027/= per month for the next 20 years [hoping the rates don't go up!!!] during those 20 years!!! If it hits 25% like it did a couple of years ago, your monthly payments go up to Kshs. 713,393.52/=!! For a three bedroom apartment!!! And then some fellows will tell you you can accelerate payments!!! To what??? A million a month maybe?? And what business are you in?? This is now ridiculous!!! Ati 34m for a 3 bed...Kenyans have lost their mind. This is where the street con-men have relocated = real estate.. Accelerated payments was the answer to most questions asked 
|
|
|
Rank: Elder Joined: 7/22/2009 Posts: 7,455
|
whiteowl wrote:MaichBlack wrote:#308 Posted : Saturday, June 28, 2014 9:56:57 AM I warned guys last year but others gave them theoretical/text book advice! Now the sh!t has hit the fan as I had warned!!! I was talking about 25% but the rates are now higher than that. You had been warned!!! ChumsQuest wrote:MaichBlack wrote:omhangla wrote:There are these arpatments; Milimani excutive arpatments (Hazina close) build by NSSF. 34 million for 3 bedroom. is it a fair deal This is exactly what I was saying!!! 34 million for a fourth floor house. And this is NSSF which is supposed to be "cheaper" than the other sharks!!! If you were to pay for this house using a 20 year mortgage [at 16% interest], it would cost you Kshs. 473,027/= every month!!! Kshs. 473,027/= per month for the next 20 years [hoping the rates don't go up!!!] during those 20 years!!! If it hits 25% like it did a couple of years ago, your monthly payments go up to Kshs. 713,393.52/=!! For a three bedroom apartment!!! And then some fellows will tell you you can accelerate payments!!! To what??? A million a month maybe?? And what business are you in?? This is now ridiculous!!! Ati 34m for a 3 bed...Kenyans have lost their mind. This is where the street con-men have relocated = real estate.. Accelerated payments was the answer to most questions asked Sasa wa accelerate to MONTHLY payments of 1,000,000/= for a three bedroom apartment!!! Hii ndiyo ubaya ya kuleta theory kwa real life!!! Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
|
|
|
Rank: Member Joined: 8/5/2011 Posts: 125
|
Ninauliza wenye mortgages... kuko vipi ndani ya sufuria. Is the heat of the interest increase enough to simmer ama its just candle-light? kiwaru wrote:MaichBlack wrote:webish wrote:tandich wrote:WHy do developers charge mortgage buyers more compared to cash buyers? This on top of the onerous fees one has to part with in arranging a mortgage. I would have expected cash buyers to pay more since they have the option of spreading their purchase price over several installments. NEVER EVER. It's always been about Time value...for that money. As a developer, the best situation would be that, everyone buys cash. Mortgage process takes time, and costs.. That said...on some projects, the difference can be so big, that it becomes a way of saying "CASH BUYERS ONLY"... Some differences are just plain ridiculous!!! Cash Buyers 6.5m Mortgage Buyers 8m 1.5m for what??? Are you the one giving the mortgage. You will get your money in cash after all. A couple of months you want to make an extra 1.5m? And even by then the cash buyers will probably have not paid everything especially if they took up possession after the mortgage buyer! Don't you think the mortgage buyer is already shafted enough?? Someone explain to me like a two year old, what extra costs (other than time) does the vendor or developer incur if the buyer is buying through mortgage? The mortgage seeking process is fraught with risk for the developer: e.g. the amount approved may not be equal to the difference needed; the many bureaucratic steps that must be processed (valuation, registration of title, registration of charge - each with numerous back-and-forth between lawyers, vendor and purchaser). There are numerous potential causes of delays The time value of money cannot be gainsaid: for every 10m tied out, the developer is probably paying interest at 15% p.a. which effectively translates to Kshs 1.5m p.a., then add the premium on the delays and inconveniences of entrepreneurship. With experience, a developer learns that the delay between sale agreement and full draw-down is often >8 months; often lasting beyond a year.
|
|
|
Rank: Member Joined: 3/26/2012 Posts: 830
|
Bottomline. Taking a mortgage is the worst decision ever. A successful man is not he who gets the best, it is he who makes the best from what he gets.
|
|
|
Rank: User Joined: 1/20/2014 Posts: 3,528
|
Some mortgages are company backed and affortable ........... bank staff. Formal education will make you a living. Self-education will make you a fortune - Jim Rohn.
|
|
|
Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
|
Othelo wrote:Some mortgages are company backed and affortable ........... bank staff. anything below 10% is ok for me... possunt quia posse videntur
|
|
|
Rank: Elder Joined: 7/11/2010 Posts: 5,040
|
S.Mutaga III wrote:Bottomline. Taking a mortgage is the worst decision ever. It's a double whammy here in KE. 1. The house is overvalued 2. The high mortgage rate on that overvalued house The investor's chief problem - and even his worst enemy - is likely to be himself
|
|
|
Rank: Member Joined: 8/5/2011 Posts: 125
|
not taking a mortgage is inefficient. Uta-save mpaka lini to acquire a dwelling place that is within "reasonable" distance from civilization (CBD)?
Meanwhile if you take a mortgage the bank will try to shaft you. aaaaarghhhh!!!!
|
|
|
Rank: New-farer Joined: 12/1/2014 Posts: 45 Location: Nairobi
|
S.Mutaga III wrote:Bottomline. Taking a mortgage is the worst decision ever. I would rather say it depends.. Ideally a mortgage helps one own a home(read property) that you need/want but you can't own/afford now (unless you can from savings et al). So the mortgagor enables you to own it but at a cost (read interest). The challenge is factors behind the cost to incure (principal is constant but interest depends on the rate movement which is determined by both market factors as well as the government behaviour (level of borrowing)). If one does major prepayments then the cost would be significantly reduced as interest payments will be reduced in a stable interests regime. The lack of many mortgagors stiffles the uptake to an extent, as most do not have a high appetite for mortgage business hence small allocation limit in their portfolio. Majority pf bank staff as said would tell its not a worst decision. etc
|
|
|
Rank: New-farer Joined: 5/19/2015 Posts: 15
|
Real Estate Woes-the secret lives of house poor canadians http://www.cbc.ca/news/b...oor-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? Invest at the point of maximum pessimism.
|
|
|
Rank: New-farer Joined: 10/28/2015 Posts: 47
|
Mortgage in Kenya currently not as attractive as can be, all basic comparative analysis aside, I'd say it's especially WORST when you can't let the unit for equal or more than the monthly installments!
|
|
|
Rank: Elder Joined: 12/25/2014 Posts: 2,300 Location: kenya
|
Emerger wrote:S.Mutaga III wrote:Bottomline. Taking a mortgage is the worst decision ever. I would rather say it depends.. Ideally a mortgage helps one own a home(read property) that you need/want but you can't own/afford now (unless you can from savings et al). So the mortgagor enables you to own it but at a cost (read interest). The challenge is factors behind the cost to incure (principal is constant but interest depends on the rate movement which is determined by both market factors as well as the government behaviour (level of borrowing)). If one does major prepayments then the cost would be significantly reduced as interest payments will be reduced in a stable interests regime. The lack of many mortgagors stiffles the uptake to an extent, as most do not have a high appetite for mortgage business hence small allocation limit in their portfolio. Majority pf bank staff as said would tell its not a worst decision. etc my colleague was working for a bank and the rate they were giving us by then was 5% no downpayment , so as long as you are a bank employee then you are safe. wait until you quit or resign then you will realize its not a good decision as you thought like what happened to him. he took a house for 3.5million in rongai in 2008.his monthly payment was something like 28k.when he quit recently it hiked to 80k+ a month. he couldn't afford it and had to sell it off after making payments for 5 yrs. Interest rates for houses should be fixed if they want to encourage ownnerships but as long as its over 10% then its worse and mbaya kabisa
|
|
|
Rank: Veteran Joined: 11/15/2013 Posts: 1,977 Location: Here
|
enyands wrote:Emerger wrote:S.Mutaga III wrote:Bottomline. Taking a mortgage is the worst decision ever. I would rather say it depends.. Ideally a mortgage helps one own a home(read property) that you need/want but you can't own/afford now (unless you can from savings et al). So the mortgagor enables you to own it but at a cost (read interest). The challenge is factors behind the cost to incure (principal is constant but interest depends on the rate movement which is determined by both market factors as well as the government behaviour (level of borrowing)). If one does major prepayments then the cost would be significantly reduced as interest payments will be reduced in a stable interests regime. The lack of many mortgagors stiffles the uptake to an extent, as most do not have a high appetite for mortgage business hence small allocation limit in their portfolio. Majority pf bank staff as said would tell its not a worst decision. etc my colleaguethe Wazua friend was working for a bank and the rate they were giving us by then was 5% no downpayment , so as long as you are a bank employee then you are safe. wait until you quit or resign then you will realize its not a good decision as you thought like what happened to him. he took a house for 3.5million in rongai in 2008.his monthly payment was something like 28k.when he quit recently it hiked to 80k+ a month. he couldn't afford it and had to sell it off after making payments for 5 yrs. Interest rates for houses should be fixed if they want to encourage ownnerships but as long as its over 10% then its worse and mbaya kabisa So how much are you paying now? Everybody STEALS, a THIEF is one who's CAUGHT stealing something of LITTLE VALUE. !!!
|
|
|
Rank: Elder Joined: 12/25/2014 Posts: 2,300 Location: kenya
|
Boris Boyka wrote:enyands wrote:Emerger wrote:S.Mutaga III wrote:Bottomline. Taking a mortgage is the worst decision ever. I would rather say it depends.. Ideally a mortgage helps one own a home(read property) that you need/want but you can't own/afford now (unless you can from savings et al). So the mortgagor enables you to own it but at a cost (read interest). The challenge is factors behind the cost to incure (principal is constant but interest depends on the rate movement which is determined by both market factors as well as the government behaviour (level of borrowing)). If one does major prepayments then the cost would be significantly reduced as interest payments will be reduced in a stable interests regime. The lack of many mortgagors stiffles the uptake to an extent, as most do not have a high appetite for mortgage business hence small allocation limit in their portfolio. Majority pf bank staff as said would tell its not a worst decision. etc my colleaguethe Wazua friend was working for a bank and the rate they were giving us by then was 5% no downpayment , so as long as you are a bank employee then you are safe. wait until you quit or resign then you will realize its not a good decision as you thought like what happened to him. he took a house for 3.5million in rongai in 2008.his monthly payment was something like 28k.when he quit recently it hiked to 80k+ a month. he couldn't afford it and had to sell it off after making payments for 5 yrs. Interest rates for houses should be fixed if they want to encourage ownnerships but as long as its over 10% then its worse and mbaya kabisa So how much are you paying now? I sold mine before I resigned. I knew what was ahead waiting for me.for him he waited thinking he could cope with the payments after quiting but he was wrong
|
|
|
Rank: Elder Joined: 7/11/2010 Posts: 5,040
|
Let's put is simply. Any mortgage with a rate higher than than the rental yield is a bad deal. The rental yield should be even higher than then mortgage rate to pay you back for the extra risk you are taking on. The investor's chief problem - and even his worst enemy - is likely to be himself
|
|
|
Wazua
»
Investor
»
Property
»
Is Taking a Mortgage the WORST Decision Ever??
Forum Jump
You cannot post new topics in this forum.
You cannot reply to topics in this forum.
You cannot delete your posts in this forum.
You cannot edit your posts in this forum.
You cannot create polls in this forum.
You cannot vote in polls in this forum.
|