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Is Taking a Mortgage the WORST Decision Ever??
Rank: Member Joined: 1/20/2015 Posts: 489 Location: Nairobi
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In summary, most Wazuans, including me earn salaries in the range of 60-100k net, of course except the few campus students here. Therefore to us, making cash outgoings of 100k per month for a period of 6 years seems to scare us! not should not scare us because i know the son of a former world famous athlete from Iten who at 26 is making close to 500k per month. Nigga started flying for KQ as a second office at 19! i think its two more years before he occupies the left seat of a Boeing plane! Kwa hivo that issue of mortgage lumpsums is very feasible depending with who you work for Enjoy every moment of your life, you never know when your time will come.
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Rank: Veteran Joined: 11/15/2013 Posts: 1,977 Location: Here
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Swenani wrote:Mike Ock wrote:@Swenani trust me, wazuans can pay. The only reason they are alarmed at the rates is because it's not a good deal The dealbeing good or not, the inconsistncies/lackof information by TPK aside wazuans seem to be alarmed that one can make payments of over 100K per months coupled with lumpsum payments in between Quote:The argument we had here is about a common mwananchi .first of all congratulation. I'll need tips and advice on later years. Having said that very few Kenyans can afford to pay 100k a month . I said earlier is possible only if you are an MPIG or someone who can afford to clear earlier. Majority of people I saw who were taking loans from banks for mortgage were wanjiku earning net of 80k and they were an employee somewhere. When will they make lumpsome of 100k a month and yet they have other bills? Quote:No, he also need to tell us whether he works for the UN or Sells dope! Quote:assuming he was not on complete lockdown since he mentions taking the missus and the kids out, also assuming there are other bills, he could well be employed with a net of around 200k which is more common these days in Nairobi.
or if he was following the 1/3 rule, that leaves him at around a net of 220k which is still very possible, especially if he works for the UN. Quote:So the question is was he straining? Did he have an alternative of buying plot then constructing without a mortgage? Was the decision he made worse compared to other options? Personally i think He paid through his nose. Lazima Ilikuwa anakunywa maji na mahindi. It wasn't the better decision. Quote:To make sense out of this, maybe he tells us how much his disposable income was before the loan! The above clearly tells you that most wazuans think earning(not paying) 100K is out of this world.Wazua is made up of bankers and investment bankers(read cashiers at banks and investment banks) Remember he was paying around 100k Monthly as the loan. Then later avgly 100k per month in fast tracking so total is 200k monthly. If one is able to pay such an amount definitely his standards of living should leave him with minimum 100k monthly for survival. Everybody STEALS, a THIEF is one who's CAUGHT stealing something of LITTLE VALUE. !!!
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Rank: Member Joined: 3/9/2012 Posts: 144
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MaichBlack wrote:dunkang wrote: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. Very sad @dunkang. This guy is lying to us in broad daylight. For a 7,000,000 loan at a fixed rate of 14%, even if he was paying 100,000 from month one without fail, it would take 12 years to complete the loan. And he is talking about 6 years?? Half the time??? @TPK - If you are trying to prove a fact, don't use lies. Use facts and actual figures. Throwing around figures and the underestimating the payment period by half is not even remotely forgivable. Ile kitu wazuans wanajua sana ni hesabu!!! Kwanza hesabu za pesa!!! @ Maich black unajua hesabu...nice I need help kuelewa hesabu za maloan! am wondering about my own hesabu in regard to a loan am servicing..tafadhali saidia...(munduzcatgmail.com   I found meaningful work🤓
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Rank: Member Joined: 9/11/2014 Posts: 228 Location: Nairobi
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Mseto binti wrote:MaichBlack wrote:dunkang wrote: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. Very sad @dunkang. This guy is lying to us in broad daylight. For a 7,000,000 loan at a fixed rate of 14%, even if he was paying 100,000 from month one without fail, it would take 12 years to complete the loan. And he is talking about 6 years?? Half the time??? @TPK - If you are trying to prove a fact, don't use lies. Use facts and actual figures. Throwing around figures and the underestimating the payment period by half is not even remotely forgivable. Ile kitu wazuans wanajua sana ni hesabu!!! Kwanza hesabu za pesa!!! @ Maich black unajua hesabu...nice I need help kuelewa hesabu za maloan! am wondering about my own hesabu in regard to a loan am servicing..tafadhali saidia...(munduzcatgmail.com There are many online calculators. For example: CBA Online CalcRepayment period in number of months
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Rank: Veteran Joined: 11/15/2013 Posts: 1,977 Location: Here
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iris wrote:Mseto binti wrote:MaichBlack wrote:dunkang wrote: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. Very sad @dunkang. This guy is lying to us in broad daylight. For a 7,000,000 loan at a fixed rate of 14%, even if he was paying 100,000 from month one without fail, it would take 12 years to complete the loan. And he is talking about 6 years?? Half the time??? @TPK - If you are trying to prove a fact, don't use lies. Use facts and actual figures. Throwing around figures and the underestimating the payment period by half is not even remotely forgivable. Ile kitu wazuans wanajua sana ni hesabu!!! Kwanza hesabu za pesa!!! @ Maich black unajua hesabu...nice I need help kuelewa hesabu za maloan! am wondering about my own hesabu in regard to a loan am servicing..tafadhali saidia...(munduzcatgmail.com There are many online calculators. For example: CBA Online CalcRepayment period in number of months http://www.cost-of-credit.com/ Will give you total cost of credit (hidden charges to layman) then obtain armotization. Everybody STEALS, a THIEF is one who's CAUGHT stealing something of LITTLE VALUE. !!!
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Rank: Veteran Joined: 11/15/2013 Posts: 1,977 Location: Here
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Deleted! Everybody STEALS, a THIEF is one who's CAUGHT stealing something of LITTLE VALUE. !!!
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Rank: Elder Joined: 3/2/2009 Posts: 26,328 Location: Masada
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Museveni wrote:Found this relevant: Buying or building a house before age 40 is a MISTAKE.Quote:My friends and I have been saving money together to build our own houses. However, after a lot of soul searching and consultation, I have come to the realization that building or buying my own house is not a priority at least till I turn about 40.
Let’s take arbitrary incomes and see what can be achieved at the respective ages
Age. Net pay kshs. Family
25. 50,000. Single
30. 100,000. New wed
35. 150,000. 1Kid
40. 200,000. 2, 3 kids
If you take a mortgage or construction loan before you turn 40, you might buy a house or build a house that might prove to be a liability.
This is why
A 2bedroom apartment in Athi River, Kitengela or Kiserian or Juja or Kikuyu will go for between 5 and 6 million. If you buy your own plot and build a house in the said areas you will spend roughly the same amount of money.
If you take a loan for the Kshs 5 million to buy or build a house today at the prevailing variable interest rates of about 18% PA you will be repaying about Kshs 78,000 per month for the next 20 years. Let’s assume that you can actually afford to repay such an amount every month. This means that between now and the time when you 1 year old kid is the 2nd year in the university, you will be repaying 78,000.
If you decide to move to another house for one reason or another, you will let out your apartment or house for about Kshs 30,000 if you are lucky. This means that you will be repaying the difference which is about Kshs 48,000 every month from your pocket.
So if you move to another house, say a bigger house closer to work or school for the kids, you will be paying rent because you might not qualify for another mortgage. Assume that now you are 40 and you have 2 or 3 kids and you need to move to a bigger house, you now move to a 3 or 4 bedroom house in South B/C or Kiambu Road or Mbagathi road. You will pay rent of about 50,000 per month. Your total monthly expenditure on housing has now increased to Kshs 98,000 i.e 48,000 (top up from the Mortgage) + 50,000 (Rent). Call it 100,000. That is already half your net pay! You are now left with 100,000 to fuel and service the car, clear your any SACCO loans you might have, pay school fees, save for high school and university and EAT. At this point, your parents are needing more medical attention and you want to do that MBA you have been postponing and start a business etc.
You might be saying, but the house or plot is appreciating in value. True but when you calculate the total repayment after 20 years you will have paid about Kshs 18.5 million assuming that the interest rate remains constant in the next 20 years which is highly unlikely. I doubt that the value of the house will have appreciated to a value anywhere near the 18.5 million. Actually, If you decide to sell the apartment or house after 10 years at Kshs 10 Million, you will make a “loss” because the amount of interest you will have paid plus the capital cost of buying the house and renovating it before selling will be higher than the selling price.
What if I already have the cash, am not taking a loan? Don’t buy the house just yet…. Use your money to make more money, don’t bury it in an immovable asset.
So, what to do?
Buy a parcel of land, like 5 acres and plant trees. Harvest the trees every 10 years and sell them as timber. One acre can hold about 2000 trees. Five acres will hold about 10,000 trees. If half of the trees die and sell the other half at Kshs 5,000 per tree, you will make about 5,000 trees x Kshs 5000 = 25 million. Surely, you can get a very decent house with 25 million.
Buy a plot and build mabati houses and rent them out for Kshs 3000 each per month. A ¼ acre plot can fit about 45 such mabati single rooms with a shared pit latrine and bathroom. 45 units x 3,000 = Kshs 135,000. If you are servicing the 5 million loan we discussed earlier, you will repay the entire loan in just 10 years without ever having to “go back to your pocket”. After the 10 years, the plot has appreciated in value and you have a cash flow of 135,000 every month. What can’t you do with such “extra” cash?
Start a “kabiashara” that will give you about Kshs 500 per day. This will translate to about Kshs 15,000 per month. Add to the 135,000 you now have a “virtual” income of Kshs 150,000.
Buy a plot for speculation and say you will sell it when your kid goes to the university. The sale price might be enough to pay school fees at Oxford or Harvard University for the entire course.
Buy shares and diversify your portfolio.
Enjoy living in a rented house and be a good tenant. Pay your rent in time and live in an area that is convenient for you and your children’s school. Get a big enough house that will fit your family.
Have some cash or “near cash” assets since they say, “opportunity knocks once at every mans’ door”…. Be ready when the knock comes…. And remember, CASH is KING.
Finally, Live life…. Maximize life… YOLO!
Perfect! Though I read this a couple of years ago, still very relevant! Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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Rank: New-farer Joined: 10/28/2015 Posts: 47
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Thanks a lot @Museveni I agree although strategy should fit each one's context.
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Rank: Elder Joined: 12/7/2012 Posts: 11,908
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@MB & #anti mortgage, there are people who have done it successfully. Leverage. Most men can't buy anything unless you pressurize them  In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
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Rank: Elder Joined: 12/25/2014 Posts: 2,300 Location: kenya
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Impunity wrote:Museveni wrote:Found this relevant: Buying or building a house before age 40 is a MISTAKE.Quote:My friends and I have been saving money together to build our own houses. However, after a lot of soul searching and consultation, I have come to the realization that building or buying my own house is not a priority at least till I turn about 40.
Let’s take arbitrary incomes and see what can be achieved at the respective ages
Age. Net pay kshs. Family
25. 50,000. Single
30. 100,000. New wed
35. 150,000. 1Kid
40. 200,000. 2, 3 kids
If you take a mortgage or construction loan before you turn 40, you might buy a house or build a house that might prove to be a liability.
This is why
A 2bedroom apartment in Athi River, Kitengela or Kiserian or Juja or Kikuyu will go for between 5 and 6 million. If you buy your own plot and build a house in the said areas you will spend roughly the same amount of money.
If you take a loan for the Kshs 5 million to buy or build a house today at the prevailing variable interest rates of about 18% PA you will be repaying about Kshs 78,000 per month for the next 20 years. Let’s assume that you can actually afford to repay such an amount every month. This means that between now and the time when you 1 year old kid is the 2nd year in the university, you will be repaying 78,000.
If you decide to move to another house for one reason or another, you will let out your apartment or house for about Kshs 30,000 if you are lucky. This means that you will be repaying the difference which is about Kshs 48,000 every month from your pocket.
So if you move to another house, say a bigger house closer to work or school for the kids, you will be paying rent because you might not qualify for another mortgage. Assume that now you are 40 and you have 2 or 3 kids and you need to move to a bigger house, you now move to a 3 or 4 bedroom house in South B/C or Kiambu Road or Mbagathi road. You will pay rent of about 50,000 per month. Your total monthly expenditure on housing has now increased to Kshs 98,000 i.e 48,000 (top up from the Mortgage) + 50,000 (Rent). Call it 100,000. That is already half your net pay! You are now left with 100,000 to fuel and service the car, clear your any SACCO loans you might have, pay school fees, save for high school and university and EAT. At this point, your parents are needing more medical attention and you want to do that MBA you have been postponing and start a business etc.
You might be saying, but the house or plot is appreciating in value. True but when you calculate the total repayment after 20 years you will have paid about Kshs 18.5 million assuming that the interest rate remains constant in the next 20 years which is highly unlikely. I doubt that the value of the house will have appreciated to a value anywhere near the 18.5 million. Actually, If you decide to sell the apartment or house after 10 years at Kshs 10 Million, you will make a “loss” because the amount of interest you will have paid plus the capital cost of buying the house and renovating it before selling will be higher than the selling price.
What if I already have the cash, am not taking a loan? Don’t buy the house just yet…. Use your money to make more money, don’t bury it in an immovable asset.
So, what to do?
Buy a parcel of land, like 5 acres and plant trees. Harvest the trees every 10 years and sell them as timber. One acre can hold about 2000 trees. Five acres will hold about 10,000 trees. If half of the trees die and sell the other half at Kshs 5,000 per tree, you will make about 5,000 trees x Kshs 5000 = 25 million. Surely, you can get a very decent house with 25 million.
Buy a plot and build mabati houses and rent them out for Kshs 3000 each per month. A ¼ acre plot can fit about 45 such mabati single rooms with a shared pit latrine and bathroom. 45 units x 3,000 = Kshs 135,000. If you are servicing the 5 million loan we discussed earlier, you will repay the entire loan in just 10 years without ever having to “go back to your pocket”. After the 10 years, the plot has appreciated in value and you have a cash flow of 135,000 every month. What can’t you do with such “extra” cash?
Start a “kabiashara” that will give you about Kshs 500 per day. This will translate to about Kshs 15,000 per month. Add to the 135,000 you now have a “virtual” income of Kshs 150,000.
Buy a plot for speculation and say you will sell it when your kid goes to the university. The sale price might be enough to pay school fees at Oxford or Harvard University for the entire course.
Buy shares and diversify your portfolio.
Enjoy living in a rented house and be a good tenant. Pay your rent in time and live in an area that is convenient for you and your children’s school. Get a big enough house that will fit your family.
Have some cash or “near cash” assets since they say, “opportunity knocks once at every mans’ door”…. Be ready when the knock comes…. And remember, CASH is KING.
Finally, Live life…. Maximize life… YOLO!
Perfect! Though I read this a couple of years ago, still very relevant! This is what iv been hunting for. Thanks iv rested my case. One is taking money from you in form of monthly payment -mortgage and the other nyumba ya mabati is generating money. What will you go for. Of course money in. . Museveni "you are the man of the house, 
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Rank: Elder Joined: 12/17/2009 Posts: 3,583 Location: Kenya
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you wait till 40-50 to get a big house only to realize you are alone in the house, while your kids are seeking independence in bed-sitters huko nairobi west ama githurai, or are tucked in a boarding school for the better part of the year.
This has been mentioned before, but there are sentiments attached to a house, treating it as an investment is not prudent.
If you can afford, at least give your kids space as they grow, give them some place to identify with.
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Rank: Elder Joined: 7/22/2009 Posts: 7,455
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Angelica _ann wrote:@MB & #anti mortgage, there are people who have done it successfully. Leverage. Most men can't buy anything unless you pressurize them  Wacha kuharibiwa wanaume jina. Men are very be good at buying stuff. The only stuff they might refuse to buy are things like 4 door fridges and Nigerian style leather seats while there is a plot on offer! Ama ulipatana na kabaya?? Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Elder Joined: 3/18/2011 Posts: 12,069 Location: Kianjokoma
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Impunity wrote:Museveni wrote:Found this relevant: Buying or building a house before age 40 is a MISTAKE.Quote:My friends and I have been saving money together to build our own houses. However, after a lot of soul searching and consultation, I have come to the realization that building or buying my own house is not a priority at least till I turn about 40.
Let’s take arbitrary incomes and see what can be achieved at the respective ages
Age. Net pay kshs. Family
25. 50,000. Single
30. 100,000. New wed
35. 150,000. 1Kid
40. 200,000. 2, 3 kids
If you take a mortgage or construction loan before you turn 40, you might buy a house or build a house that might prove to be a liability.
What if I already have the cash, am not taking a loan? Don’t buy the house just yet…. Use your money to make more money, don’t bury it in an immovable asset.
So, what to do?
Buy a parcel of land, like 5 acres and plant trees. Harvest the trees every 10 years and sell them as timber. One acre can hold about 2000 trees. Five acres will hold about 10,000 trees. If half of the trees die and sell the other half at Kshs 5,000 per tree, you will make about 5,000 trees x Kshs 5000 = 25 million. Surely, you can get a very decent house with 25 million.
Perfect! Though I read this a couple of years ago, still very relevant! which trees are these?? 2000 trees per acre?
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Rank: Elder Joined: 12/25/2014 Posts: 2,300 Location: kenya
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Lolest! wrote:Impunity wrote:Museveni wrote:Found this relevant: Buying or building a house before age 40 is a MISTAKE.Quote:My friends and I have been saving money together to build our own houses. However, after a lot of soul searching and consultation, I have come to the realization that building or buying my own house is not a priority at least till I turn about 40.
Let’s take arbitrary incomes and see what can be achieved at the respective ages
Age. Net pay kshs. Family
25. 50,000. Single
30. 100,000. New wed
35. 150,000. 1Kid
40. 200,000. 2, 3 kids
If you take a mortgage or construction loan before you turn 40, you might buy a house or build a house that might prove to be a liability.
What if I already have the cash, am not taking a loan? Don’t buy the house just yet…. Use your money to make more money, don’t bury it in an immovable asset.
So, what to do?
Buy a parcel of land, like 5 acres and plant trees. Harvest the trees every 10 years and sell them as timber. One acre can hold about 2000 trees. Five acres will hold about 10,000 trees. If half of the trees die and sell the other half at Kshs 5,000 per tree, you will make about 5,000 trees x Kshs 5000 = 25 million. Surely, you can get a very decent house with 25 million.
Perfect! Though I read this a couple of years ago, still very relevant! which trees are these?? 2000 trees per acre? Rather let's narrow down , what should be the spacing between one tree and another one feet or two feet ?
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Rank: Member Joined: 1/20/2015 Posts: 489 Location: Nairobi
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It also depends with the area....you cannot grow eucalyptus or cypress and expect them to grow and become so big in Kitengela......the climatic conditions of an area determines a lot. Enjoy every moment of your life, you never know when your time will come.
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Rank: Elder Joined: 2/16/2007 Posts: 2,114
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UpcomingPaperChaser wrote:It also depends with the area....you cannot grow eucalyptus or cypress and expect them to grow and become so big in Kitengela......the climatic conditions of an area determines a lot. Sub-surface rock as well..
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Rank: Member Joined: 2/18/2011 Posts: 448
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Mseto binti wrote:MaichBlack wrote:dunkang wrote: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. Very sad @dunkang. This guy is lying to us in broad daylight. For a 7,000,000 loan at a fixed rate of 14%, even if he was paying 100,000 from month one without fail, it would take 12 years to complete the loan. And he is talking about 6 years?? Half the time??? @TPK - If you are trying to prove a fact, don't use lies. Use facts and actual figures. Throwing around figures and the underestimating the payment period by half is not even remotely forgivable. Ile kitu wazuans wanajua sana ni hesabu!!! Kwanza hesabu za pesa!!! @ Maich black unajua hesabu...nice I need help kuelewa hesabu za maloan! am wondering about my own hesabu in regard to a loan am servicing..tafadhali saidia...(munduzcatgmail.com @Maich et al, TPK gave his real experience. KUSCO gives a Ksh 7 Million loan at 14% p.a resulting in monthly payment of 93,222. You also get the 7 million based on a multiple of 5 times your savings meaning TPK already had approximately 1.4 Million in cash with KUSCO which also earns an annual dividend (5-10%) over the 6 years. Links below on SOP of the loan and pricing. http://www.kuscco.com/in...php/kuscco-housing-fund
http://www.kuscco.com/in...php/kuscco-housing-fund
While he was non specific on how many lumpsum payments he made over the six years period( I choose to look at the 100K lumpsum payment as just one example),it is quite possible he paid it all in 6 years as follows: 93,222 per month for 6 months = 6,711,984Using of cash deposit to settle balance= 1,400,00Lumpsum (extra) payments amounting to = 1,888,016 in 6 years or 314,670 per annum over the six years or 26,223 extra per month over the 6 years (72 months) he took to clear the loan. PS: I have not included earnings from dividends from the Ksh 1.4 Million saved which would be at least 70k p.a for each of the 6 years (420K in total) All these are assumptions but TPK demonstrated he did this practically although he chose not to give specifics on the payments. TPK i salute you for sharing your story on an efficient and smart way to overcome the crazy interest rates and get value for money.
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Rank: Member Joined: 10/16/2006 Posts: 21
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MaichBlack wrote:@vin and @Lolest - See post# 318 in this thread. I got into into Co-op at 16/= levels. I am now approximately 40% and it's not even a year yet!I also got into CFC in the 40's level. Now that is currently worth 135 + 22.75 (CFC Stanbic + CFC Insurance Holdings) = 157.75/= This is approximately 250% returns to date.. Annualized, this would be in excess of 50% returns annually!!!Never mind I added some more at 33/= during the rights issue. I am just wondering how the investment is doing. We may not be talking about the same if you never took the profits at the righ time.
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Rank: Elder Joined: 12/25/2014 Posts: 2,300 Location: kenya
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mibbz wrote:Mseto binti wrote:MaichBlack wrote:dunkang wrote: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. Very sad @dunkang. This guy is lying to us in broad daylight. For a 7,000,000 loan at a fixed rate of 14%, even if he was paying 100,000 from month one without fail, it would take 12 years to complete the loan. And he is talking about 6 years?? Half the time??? @TPK - If you are trying to prove a fact, don't use lies. Use facts and actual figures. Throwing around figures and the underestimating the payment period by half is not even remotely forgivable. Ile kitu wazuans wanajua sana ni hesabu!!! Kwanza hesabu za pesa!!! @ Maich black unajua hesabu...nice I need help kuelewa hesabu za maloan! am wondering about my own hesabu in regard to a loan am servicing..tafadhali saidia...(munduzcatgmail.com @Maich et al, TPK gave his real experience. KUSCO gives a Ksh 7 Million loan at 14% p.a resulting in monthly payment of 93,222. You also get the 7 million based on a multiple of 5 times your savings meaning TPK already had approximately 1.4 Million in cash with KUSCO which also earns an annual dividend (5-10%) over the 6 years. Links below on SOP of the loan and pricing. http://www.kuscco.com/in...php/kuscco-housing-fund
http://www.kuscco.com/in...php/kuscco-housing-fund
While he was non specific on how many lumpsum payments he made over the six years period( I choose to look at the 100K lumpsum payment as just one example),it is quite possible he paid it all in 6 years as follows: 93,222 per month for 6 months = 6,711,984Using of cash deposit to settle balance= 1,400,00Lumpsum (extra) payments amounting to = 1,888,016 in 6 years or 314,670 per annum over the six years or 26,223 extra per month over the 6 years (72 months) he took to clear the loan. PS: I have not included earnings from dividends from the Ksh 1.4 Million saved which would be at least 70k p.a for each of the 6 years (420K in total) All these are assumptions but TPK demonstrated he did this practically although he chose not to give specifics on the payments. TPK i salute you for sharing your story on an efficient and smart way to overcome the crazy interest rates and get value for money. Your math is off sir .check highlighted and reverse please 93222x6 should be 559,332 I don't know where you got 6m
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Rank: Member Joined: 5/4/2015 Posts: 241 Location: Kahno
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93,222 per month for 6 YEARS = 6,711,984
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