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Is Taking a Mortgage the WORST Decision Ever??
Rank: Member Joined: 2/18/2011 Posts: 448
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enyands wrote: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 YEARS = 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 Apologies.It is 6 YEARS. I shall edit the post and correct it. Thanks
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Rank: Member Joined: 2/18/2011 Posts: 448
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@kimanimsc thank you for using your 1st post to correct the error i made.
All in all this thread highlights it is possible to deploy smart and tactful methodologies in procuring a house/home.
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Rank: Member Joined: 9/11/2015 Posts: 244 Location: Thika
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Taking a mortgage is not the worst decision ever. Taking a mortgage to buy an apartment (where you only own one unit and will continue paying rent under some other name "service charge") and not the land is the worst decision ever. If you MUST take a mortgage,make sure it is for a stand alone townhouse with a valid title deed in your name and ample compound. Since men have learned to shoot without missing, I have learned to fly without perching
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Rank: Veteran Joined: 11/15/2013 Posts: 1,977 Location: Here
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Jon Jones wrote:Taking a mortgage is not the worst decision ever. Taking a mortgage to buy an apartment (where you only own one unit and will continue paying rent under some other name "service charge") and not the land is the worst decision ever. If you MUST take a mortgage,make sure it is for a stand alone townhouse with a valid title deed in your name and ample compound. ...and the mortgage must be fast tracked and finished in avg 5yrs. Everybody STEALS, a THIEF is one who's CAUGHT stealing something of LITTLE VALUE. !!!
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Rank: Veteran Joined: 8/28/2015 Posts: 1,247
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A loan is not a windfall gain.it most be paid with interest-and in kenya this not just pennies. You will have to pay until you legs thins out like those of a mosquito. With that loan the bank intends to hook u up with a lifesucking machine and u will be saluted as a fallen hero on ur fall. Paying a loan at interest rates higher than 10% is pure slaverly. So what do you do to survive beyond this scheme. Spread your loan for as long as possible to enjoy lowest possible installments. Then pay as much as you can. Never to pay beyond 6yrs.otherwise Wait for the auction and booked ur space at langata cementry or at the lonely columns. ,Behold, a sower went forth to sow;....
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Rank: Veteran Joined: 8/28/2015 Posts: 1,247
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A loan is not a windfall gain.it most be paid with interest-and in kenya this not just pennies. You will have to pay until you legs thins out like those of a mosquito. With that loan the bank intends to hook u up with a lifesucking machine and u will be saluted as a fallen hero on ur fall. Paying a loan at interest rates higher than 10% is pure slaverly. So what do you do to survive beyond this scheme. Spread your loan for as long as possible to enjoy lowest possible installments. Then pay as much as you can. Never to pay beyond 6yrs.otherwise Wait for the auction and booked ur space at langata cementry or at the lonely columns. ,Behold, a sower went forth to sow;....
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Rank: Elder Joined: 12/25/2014 Posts: 2,300 Location: kenya
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muandiwambeu wrote:A loan is not a windfall gain.it most be paid with interest-and in kenya this not just pennies. You will have to pay until you legs thins out like those of a mosquito. With that loan the bank intends to hook u up with a lifesucking machine and u will be saluted as a fallen hero on ur fall. Paying a loan at interest rates higher than 10% is pure slaverly. So what do you do to survive beyond this scheme. Spread your loan for as long as possible to enjoy lowest possible installments. Then pay as much as you can. Never to pay beyond 6yrs.otherwise Wait for the auction and booked ur space at langata cementry or at the lonely columns. @muandiwambeu cant agree anymore. Let young people with a duty to feed their ego take these apartment houses. ATI service charge of 20k every month . Dangerous.mbaya sana kabisa
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Rank: Member Joined: 9/11/2015 Posts: 244 Location: Thika
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enyands wrote:muandiwambeu wrote:A loan is not a windfall gain.it most be paid with interest-and in kenya this not just pennies. You will have to pay until you legs thins out like those of a mosquito. With that loan the bank intends to hook u up with a lifesucking machine and u will be saluted as a fallen hero on ur fall. Paying a loan at interest rates higher than 10% is pure slaverly. So what do you do to survive beyond this scheme. Spread your loan for as long as possible to enjoy lowest possible installments. Then pay as much as you can. Never to pay beyond 6yrs.otherwise Wait for the auction and booked ur space at langata cementry or at the lonely columns. @muandiwambeu cant agree anymore. Let young people with a duty to feed their ego take these apartment houses. ATI service charge of 20k every month . Dangerous.mbaya sana kabisa Instant gratification. They want to convince anyone who cares that they are in the dough, with a furnished apartment. Needless to say, they realize their mistake once maturity sets in. Indeed, they pay millions to be tenants for the rest of their lives. They literally pay to be slaves of the developing company. The developing company retains the title deed and give them little pieces of paper signed by a gang of thieves called lawyers. Then the development company claims a "service charge" and other fees to manage the property. What is the point of having a house you cant call your own since you have no title deed, pay rent "service charge" which is almost the same amount that you use to pay rent in the same apartment. Since men have learned to shoot without missing, I have learned to fly without perching
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Rank: Veteran Joined: 8/25/2012 Posts: 1,826
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what happens when one fails to pay the service charge, I am sure the company can not auction your house or apartment for that.
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Rank: Elder Joined: 12/25/2014 Posts: 2,300 Location: kenya
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sitaki.kujulikana wrote:what happens when one fails to pay the service charge, I am sure the company can not auction your house or apartment for that. Unaweza tafutiwa mikora Kwa gate.anyway on serious note can someone help
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Rank: User Joined: 8/15/2013 Posts: 13,237 Location: Vacuum
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Jon Jones wrote:enyands wrote:muandiwambeu wrote:A loan is not a windfall gain.it most be paid with interest-and in kenya this not just pennies. You will have to pay until you legs thins out like those of a mosquito. With that loan the bank intends to hook u up with a lifesucking machine and u will be saluted as a fallen hero on ur fall. Paying a loan at interest rates higher than 10% is pure slaverly. So what do you do to survive beyond this scheme. Spread your loan for as long as possible to enjoy lowest possible installments. Then pay as much as you can. Never to pay beyond 6yrs.otherwise Wait for the auction and booked ur space at langata cementry or at the lonely columns. @muandiwambeu cant agree anymore. Let young people with a duty to feed their ego take these apartment houses. ATI service charge of 20k every month . Dangerous.mbaya sana kabisa Instant gratification. They want to convince anyone who cares that they are in the dough, with a furnished apartment. Needless to say, they realize their mistake once maturity sets in. Indeed, they pay millions to be tenants for the rest of their lives. They literally pay to be slaves of the developing company. The developing company retains the title deed and give them little pieces of paper signed by a gang of thieves called lawyers. Then the development company claims a "service charge" and other fees to manage the property. What is the point of having a house you cant call your own since you have no title deed, pay rent "service charge" which is almost the same amount that you use to pay rent in the same apartment. We can't all be the same, different people have different tastes and varying financial capacity If Obiero did it, Who Am I?
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Rank: Elder Joined: 6/2/2011 Posts: 4,818 Location: -1.2107, 36.8831
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sitaki.kujulikana wrote:what happens when one fails to pay the service charge, I am sure the company can not auction your house or apartment for that. 1. Normally, they display your name in a big notice board at the main entrance as "LIST OF DEFAULTERS". 2. At Nyayo Embakasi, though the service charge is an acceptable 2,500/- p.m, they are known to PUT A HUGE PADLOCK and lock you out of your "own house". This happens if you default for a very long time (I.e. over 50,000/-). YES, they can auction your house. Its all in the fine prints. Receive with simplicity everything that happens to you.” ― Rashi
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Rank: Veteran Joined: 8/28/2015 Posts: 1,247
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Swenani wrote:Jon Jones wrote:enyands wrote:muandiwambeu wrote:A loan is not a windfall gain.it most be paid with interest-and in kenya this not just pennies. You will have to pay until you legs thins out like those of a mosquito. With that loan the bank intends to hook u up with a lifesucking machine and u will be saluted as a fallen hero on ur fall. Paying a loan at interest rates higher than 10% is pure slaverly. So what do you do to survive beyond this scheme. Spread your loan for as long as possible to enjoy lowest possible installments. Then pay as much as you can. Never to pay beyond 6yrs.otherwise Wait for the auction and booked ur space at langata cementry or at the lonely columns. @muandiwambeu cant agree anymore. Let young people with a duty to feed their ego take these apartment houses. ATI service charge of 20k every month . Dangerous.mbaya sana kabisa Instant gratification. They want to convince anyone who cares that they are in the dough, with a furnished apartment. Needless to say, they realize their mistake once maturity sets in. Indeed, they pay millions to be tenants for the rest of their lives. They literally pay to be slaves of the developing company. The developing company retains the title deed and give them little pieces of paper signed by a gang of thieves called lawyers. Then the development company claims a "service charge" and other fees to manage the property. What is the point of having a house you cant call your own since you have no title deed, pay rent "service charge" which is almost the same amount that you use to pay rent in the same apartment. We can't all be the same, different people have different tastes and varying financial capacity Prudence and rationale. A mosquito bite is not a certainity to malaria but its worthwhile to note that, that bloodsucking insect is a killer malaria vector. ,Behold, a sower went forth to sow;....
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Rank: User Joined: 8/15/2013 Posts: 13,237 Location: Vacuum
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muandiwambeu wrote:Swenani wrote:Jon Jones wrote:enyands wrote:muandiwambeu wrote:A loan is not a windfall gain.it most be paid with interest-and in kenya this not just pennies. You will have to pay until you legs thins out like those of a mosquito. With that loan the bank intends to hook u up with a lifesucking machine and u will be saluted as a fallen hero on ur fall. Paying a loan at interest rates higher than 10% is pure slaverly. So what do you do to survive beyond this scheme. Spread your loan for as long as possible to enjoy lowest possible installments. Then pay as much as you can. Never to pay beyond 6yrs.otherwise Wait for the auction and booked ur space at langata cementry or at the lonely columns. @muandiwambeu cant agree anymore. Let young people with a duty to feed their ego take these apartment houses. ATI service charge of 20k every month . Dangerous.mbaya sana kabisa Instant gratification. They want to convince anyone who cares that they are in the dough, with a furnished apartment. Needless to say, they realize their mistake once maturity sets in. Indeed, they pay millions to be tenants for the rest of their lives. They literally pay to be slaves of the developing company. The developing company retains the title deed and give them little pieces of paper signed by a gang of thieves called lawyers. Then the development company claims a "service charge" and other fees to manage the property. What is the point of having a house you cant call your own since you have no title deed, pay rent "service charge" which is almost the same amount that you use to pay rent in the same apartment. We can't all be the same, different people have different tastes and varying financial capacity Prudence and rationale. A mosquito bite is not a certainity to malaria but its worthwhile to note that, that bloodsucking insect is a killer malaria vector. Prudence and rationale is subjective. If Obiero did it, Who Am I?
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Rank: Elder Joined: 7/28/2015 Posts: 9,562 Location: Rodi Kopany, Homa Bay
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dunkang wrote:sitaki.kujulikana wrote:what happens when one fails to pay the service charge, I am sure the company can not auction your house or apartment for that. 1. Normally, they display your name in a big notice board at the main entrance as "LIST OF DEFAULTERS". 2. At Nyayo Embakasi, though the service charge is an acceptable 2,500/- p.m, they are known to PUT A HUGE PADLOCK and lock you out of your "own house". This happens if you default for a very long time (I.e. over 50,000/-). YES, they can auction your house. Its all in the fine prints. Wololo, that is crossing the red line.
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Rank: Veteran Joined: 8/28/2015 Posts: 1,247
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Choices have consequences so do not get astonished. Usichangae! ,Behold, a sower went forth to sow;....
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Rank: Veteran Joined: 8/28/2015 Posts: 1,247
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Swenani wrote:muandiwambeu wrote:Swenani wrote:Jon Jones wrote:enyands wrote:muandiwambeu wrote:A loan is not a windfall gain.it most be paid with interest-and in kenya this not just pennies. You will have to pay until you legs thins out like those of a mosquito. With that loan the bank intends to hook u up with a lifesucking machine and u will be saluted as a fallen hero on ur fall. Paying a loan at interest rates higher than 10% is pure slaverly. So what do you do to survive beyond this scheme. Spread your loan for as long as possible to enjoy lowest possible installments. Then pay as much as you can. Never to pay beyond 6yrs.otherwise Wait for the auction and booked ur space at langata cementry or at the lonely columns. @muandiwambeu cant agree anymore. Let young people with a duty to feed their ego take these apartment houses. ATI service charge of 20k every month . Dangerous.mbaya sana kabisa Instant gratification. They want to convince anyone who cares that they are in the dough, with a furnished apartment. Needless to say, they realize their mistake once maturity sets in. Indeed, they pay millions to be tenants for the rest of their lives. They literally pay to be slaves of the developing company. The developing company retains the title deed and give them little pieces of paper signed by a gang of thieves called lawyers. Then the development company claims a "service charge" and other fees to manage the property. What is the point of having a house you cant call your own since you have no title deed, pay rent "service charge" which is almost the same amount that you use to pay rent in the same apartment. We can't all be the same, different people have different tastes and varying financial capacity Prudence and rationale. A mosquito bite is not a certainity to malaria but its worthwhile to note that, that bloodsucking insect is a killer malaria vector. Prudence and rationale is subjective. Sure. Wisdom is not cleverliness. Then, when subjectivity is irrationale the rationale is objectivity. Why subjectively get a ring from the sucker? ,Behold, a sower went forth to sow;....
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Rank: Veteran Joined: 8/25/2012 Posts: 1,826
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hardwood wrote:dunkang wrote:sitaki.kujulikana wrote:what happens when one fails to pay the service charge, I am sure the company can not auction your house or apartment for that. 1. Normally, they display your name in a big notice board at the main entrance as "LIST OF DEFAULTERS". 2. At Nyayo Embakasi, though the service charge is an acceptable 2,500/- p.m, they are known to PUT A HUGE PADLOCK and lock you out of your "own house". This happens if you default for a very long time (I.e. over 50,000/-). YES, they can auction your house. Its all in the fine prints. Wololo, that is crossing the red line. Interesting, but the padlock thing, do they forcibly evict whoever is in the house first before locking it, and on the auctioning part that would require one to have signed the house as collateral or something, otherwise I would assume a court case would be necessary to attach ones assets for a debt. Unless Kenyans attach a lot of ego to their places of residence, but judging by our corrupt ways, and just looking at our road driving culture, I would expect lots of defaulters on the service charge.
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Rank: Member Joined: 6/21/2010 Posts: 345 Location: easto
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Recently I moved to an employer whose mortgage rate is 3% p.a reducing balance. I cant wait to get confirmed and immediately take the maximum mortgage possible with my salary. The only concern is how I will fast track the payments. I see many pros with this interest rate. Any cons? "The problem with the world is that the intelligent people are full of doubts, while the stupid ones are full of confidence." ― Charles Bukowski
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Rank: Elder Joined: 7/22/2009 Posts: 7,455
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hardwood wrote:dunkang wrote:sitaki.kujulikana wrote:what happens when one fails to pay the service charge, I am sure the company can not auction your house or apartment for that. 1. Normally, they display your name in a big notice board at the main entrance as "LIST OF DEFAULTERS". 2. At Nyayo Embakasi, though the service charge is an acceptable 2,500/- p.m, they are known to PUT A HUGE PADLOCK and lock you out of your "own house". This happens if you default for a very long time (I.e. over 50,000/-). YES, they can auction your house. Its all in the fine prints. Wololo, that is crossing the red line. Hapo ni kununua panga pap!!! 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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Is Taking a Mortgage the WORST Decision Ever??
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