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Larayna
#1 Posted : Sunday, December 31, 2017 1:09:21 AM
Rank: New-farer


Joined: 1/10/2016
Posts: 15
Location: Machu Pichu
Well, l got a commercial mortgage balance of Kes 9 million which includes just over KES 2 million as interest. Which l service at 320k a month. With 2.5 years of the term left.

I have an opportunity to borrow Kuscco a maximum of KES 7 million repayable at 93k for 15 years.

Is it prudent I use the Kuscco loan to offset my mortgage balance, "saving" me Kes 2 million in interest, then use my monthly savings to plough into a new construction project. Or should Kuscco loan go straight into the new project

Or am l trying to put a cart in front of a horse
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Mukiri
#2 Posted : Sunday, December 31, 2017 1:52:46 AM
Rank: Elder


Joined: 7/11/2012
Posts: 5,222
The way I see it, one is able to run faster and further, if they aren't carrying unnecessary weight. Do away with the mortgage and start on a fresh slate

Proverbs 19:21
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Swenani
#3 Posted : Sunday, December 31, 2017 8:27:30 AM
Rank: User


Joined: 8/15/2013
Posts: 13,237
Location: Vacuum
what is th interest rate applicable to both and on what basis?
If Obiero did it, Who Am I?
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maka
#4 Posted : Sunday, December 31, 2017 10:32:56 AM
Rank: Elder


Joined: 4/22/2010
Posts: 11,522
Location: Nairobi
Larayna wrote:
Well, l got a commercial mortgage balance of Kes 9 million which includes just over KES 2 million as interest. Which l service at 320k a month. With 2.5 years of the term left.

I have an opportunity to borrow Kuscco a maximum of KES 7 million repayable at 93k for 15 years.

Is it prudent I use the Kuscco loan to offset my mortgage balance, "saving" me Kes 2 million in interest, then use my monthly savings to plough into a new construction project. Or should Kuscco loan go straight into the new project

Or am l trying to put a cart in front of a horse


Use the KUSCCO loan to pay the commercial mortgage...
possunt quia posse videntur
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obiero
#5 Posted : Sunday, December 31, 2017 10:42:56 AM
Rank: Elder


Joined: 6/23/2009
Posts: 13,516
Location: nairobi
Swenani wrote:
what is th interest rate applicable to both and on what basis?

The interest rate is the main factor plus a shorter tenor is always less expensive to the borrower

HF 90,000 ABP 3.83; KQ 414,100 ABP 7.92; MTN 23,800 ABP 6.45
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sparkly
#6 Posted : Sunday, December 31, 2017 11:05:08 AM
Rank: Elder


Joined: 9/23/2009
Posts: 8,083
Location: Enk are Nyirobi
Larayna wrote:
Well, l got a commercial mortgage balance of Kes 9 million which includes just over KES 2 million as interest. Which l service at 320k a month. With 2.5 years of the term left.

I have an opportunity to borrow Kuscco a maximum of KES 7 million repayable at 93k for 15 years.

Is it prudent I use the Kuscco loan to offset my mortgage balance, "saving" me Kes 2 million in interest, then use my monthly savings to plough into a new construction project. Or should Kuscco loan go straight into the new project

Or am l trying to put a cart in front of a horse


I am not competent to comment. Instead, i ask for advice on how you made it so far. My real estate development is yet to take off the ground.
Life is short. Live passionately.
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obiero
#7 Posted : Sunday, December 31, 2017 11:47:02 AM
Rank: Elder


Joined: 6/23/2009
Posts: 13,516
Location: nairobi
sparkly wrote:
Larayna wrote:
Well, l got a commercial mortgage balance of Kes 9 million which includes just over KES 2 million as interest. Which l service at 320k a month. With 2.5 years of the term left.

I have an opportunity to borrow Kuscco a maximum of KES 7 million repayable at 93k for 15 years.

Is it prudent I use the Kuscco loan to offset my mortgage balance, "saving" me Kes 2 million in interest, then use my monthly savings to plough into a new construction project. Or should Kuscco loan go straight into the new project

Or am l trying to put a cart in front of a horse


I am not competent to comment. Instead, i ask for advice on how you made it so far. My real estate development is yet to take off the ground.

One step at a time.. You will one day make it, if you commit to success

HF 90,000 ABP 3.83; KQ 414,100 ABP 7.92; MTN 23,800 ABP 6.45
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mufasa
#8 Posted : Sunday, December 31, 2017 2:34:50 PM
Rank: Member


Joined: 4/15/2008
Posts: 202
I find it prudent to always use "other peoples" money to advance my project for as long as I can at the lowest interest rate as possible.
This means, I would use the kussco to free up more cash by clearing the 9million loan
Do it today! Tomorrow is promise to no-one.
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Larayna
#9 Posted : Sunday, December 31, 2017 3:53:48 PM
Rank: New-farer


Joined: 1/10/2016
Posts: 15
Location: Machu Pichu
obiero wrote:
Swenani wrote:
what is th interest rate applicable to both and on what basis?

The interest rate is the main factor plus a shorter tenor is always less expensive to the borrower


The applicable for both is 14% as for now. But the mortgage one is variable. Meaning if the law on interest rate cap is repealed or amended, I will wake up one day to 20% plus rate. And I have been there before.
Secondly,I don't intend to go full term with the KUSCCO loan.
Maybe l missed painting the picture more clearer
My wife too qualifies for a KES 7 million Kuscco loan. So essentially am trying to "remortgage " Then use the her loan to plough into a new project plus what l will "save" in monthy repayments as the Kuscco loan will serviced at 95k a month whilst my current mortgage is serviced at 320k a month.
Assuming the new project succeeds l should pay off the Kuscco loan within 5 yeats
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Larayna
#10 Posted : Sunday, December 31, 2017 4:42:08 PM
Rank: New-farer


Joined: 1/10/2016
Posts: 15
Location: Machu Pichu
obiero wrote:
Swenani wrote:
what is th interest rate applicable to both and on what basis?

The interest rate is the main factor plus a shorter tenor is always less expensive to the borrower


The applicable rate for both is 14% as for now. But the mortgage one is variable. Meaning if the law on interest rate cap is repealed or amended, I will wake up one day to 20% plus rate. I have been there before and it hurts.
Secondly,I don't intend to go full term with the KUSCCO loan. My idea is about freeing up and reinvesting cash.
Please let me paint the picture more clearer
My wife too qualifies for a KES 7 million Kuscco loan. Essentially am technically trying to "remortgage " Then use her loan to plough into a new project plus what l will "save" in monthy repayments as the Kuscco loan will be serviced at 95k a month whilst my current mortgage is serviced at 320k a month.
Assuming the new project succeeds l should pay off the Kuscco loan within 5 years
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Larayna
#11 Posted : Monday, January 01, 2018 3:44:05 PM
Rank: New-farer


Joined: 1/10/2016
Posts: 15
Location: Machu Pichu
obiero wrote:
sparkly wrote:
Larayna wrote:
Well, l got a commercial mortgage balance of Kes 9 million which includes just over KES 2 million as interest. Which l service at 320k a month. With 2.5 years of the term left.

I have an opportunity to borrow Kuscco a maximum of KES 7 million repayable at 93k for 15 years.

Is it prudent I use the Kuscco loan to offset my mortgage balance, "saving" me Kes 2 million in interest, then use my monthly savings to plough into a new construction project. Or should Kuscco loan go straight into the new project

Or am l trying to put a cart in front of a horse


I am not competent to comment. Instead, i ask for advice on how you made it so far. My real estate development is yet to take off the ground.

One step at a time.. You will one day make it, if you commit to success

Well Sparkly, You will sparkle one day. As Obiero said, take one step at a time and get wise counsel from wazuans whenever you're unsure
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