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Is Taking a Mortgage the WORST Decision Ever??
Rank: Member Joined: 8/17/2011 Posts: 207 Location: humu humu
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icecube wrote:KulaRaha wrote:I took a mortgage to buy my own home just before PEV in 2007, October. I managed to get a fixed rate for the period...the repayment has not changed.
Currently, the property is up 260% in value. When I first started paying the instalments, my best friend who lived down the road was paying rent at 70% of my repayment. As at 2012, his rent went higher than my repayment by 20%. Now I dont even ask how much more he is paying...rents in my area have escalated to astronomical levels. He has a flat, I have a townhouse with 2 gardens.
What extra funds I manage every year, I pay up part of the principal, and use the rest to buy other assets if possible. My mortgage will end October 2016.
I could not have built my own place as I could not have afforded land where I live. Min is 3 acres, gated communities. I think I made a good decision. At least, better than my friend. I like this. This sounds like a very wise decision. I think the beauty with a mortgage is that it makes you own a house in a place you may not afford to buy a plot and build in. what did you mean when you said "he has a flat above?" Taking a Mortgage is NOT the worst decision Ever. one of the reason we work so hard is to provide SHELTER to our loved ones. House prices in and around Nairobi have really escalated.the demand is strong and considering the demographics, will stay that way for years to come. a big majority of people with mortgages as opposed to those who construct their own, want to sell their homes at some point in the future. Its ok to compare real estate Vs stock market returns, but plain wrong to make a decision as to which one is better!
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Rank: Elder Joined: 5/27/2008 Posts: 3,760
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Joshua Oigara at Mindspeak today, 'I took a mortgage a while back and it was a very painful experience. In retrospect it is one of the wisest decisions I've ever taken.'
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Rank: Member Joined: 10/19/2009 Posts: 671 Location: Nairobi
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Gordon Gekko wrote:Joshua Oigara at Mindspeak today, 'I took a mortgage a while back and it was a very painful experience. In retrospect it is one of the wisest decisions I've ever taken.' Must have humbled him. but came out wiser... 
Life is joy, death is peace, but the transition is very difficult.
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Rank: User Joined: 1/20/2014 Posts: 3,528
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Kenya’s property market rewards cash buyers at expense of mortgage takers; http://www.businessdaily...6/-/8x00s3/-/index.html
Formal education will make you a living. Self-education will make you a fortune - Jim Rohn.
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Rank: Member Joined: 2/7/2014 Posts: 155
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Article above is a followup and further analysis to the article below.... http://www.businessdaily...2/-/12fkykc/-/index.html
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Rank: New-farer Joined: 10/27/2010 Posts: 26 Location: NBI
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Mortgage isn't working for me... I feel that the bank is taking a hard line especially since the split of interest and principle is 93%!! which means if my instalment is 100k 93k is interest only 7k is principle. My Business has hit some headwinds but the bank isn’t having any of that. Any valuable advice would be welcome.  WTF
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Rank: Elder Joined: 6/2/2011 Posts: 4,818 Location: -1.2107, 36.8831
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kamaug wrote:Mortgage isn't working for me... I feel that the bank is taking a hard line especially since the split of interest and principle is 93%!! which means if my instalment is 100k 93k is interest only 7k is principle. My Business has hit some headwinds but the bank isn’t having any of that. Any valuable advice would be welcome. JUST SELL IT!!! Receive with simplicity everything that happens to you.” ― Rashi
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Rank: Elder Joined: 6/23/2009 Posts: 13,519 Location: nairobi
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dunkang wrote:kamaug wrote:Mortgage isn't working for me... I feel that the bank is taking a hard line especially since the split of interest and principle is 93%!! which means if my instalment is 100k 93k is interest only 7k is principle. My Business has hit some headwinds but the bank isn’t having any of that. Any valuable advice would be welcome. JUST SELL IT!!! Woke up at 5.35am today js thinkin of my home debt. I dont like to call it mortgage since I found out that the word means 'death grip' in latin
HF 90,000 ABP 3.83; KQ 414,100 ABP 7.92; MTN 23,800 ABP 6.45
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Rank: Veteran Joined: 1/4/2010 Posts: 1,668 Location: nairobi
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mortgage works when looked at from a long term capital gains point of view plus the benefit of ease of property ownership with little or less money down.Without a mortgage, the average property owner will have to caugh out a generous ammount of funds to be a property owner, something which a mortgage beneficiary doesnt have to deal with. In a country like kenya where property value rises astronomically, the mortgage owner stands to benefit alot after 10 to 20 years from the capital gains. As Iron Sharpens Iron, So one Man Sharpens Another.
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Rank: Member Joined: 2/7/2014 Posts: 155
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obiero wrote:dunkang wrote:kamaug wrote:Mortgage isn't working for me... I feel that the bank is taking a hard line especially since the split of interest and principle is 93%!! which means if my instalment is 100k 93k is interest only 7k is principle. My Business has hit some headwinds but the bank isn’t having any of that. Any valuable advice would be welcome. JUST SELL IT!!! Woke up at 5.35am today js thinkin of my home debt. I dont like to call it mortgage since I found out that the word means 'death grip' in latin @Obiero...i actually thought 'mortgage' is a french word for slow death.
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Rank: Member Joined: 8/5/2011 Posts: 125
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Just paid the first instalment into a 25 year old home loan (aka slow death). My reasons for going into mortgage:
1. Peace of mind... since my family must live somewhere, it had better be in MY HOUSE
2. Expense savings: initially an oxy-moron since 96% of the premiums go to interest payment. But the mortgage is 150% of the rent for that hse after raising 15%.
In my previous house I noticed that rent had doubled in about 5 years. So I am thinking long term here
3. Capital appreciation: with the estimated 12% annual capital appreciation, I am building equity that am living in, and I can tap into for whatever
Disclaimer: I am praying to God and i have every intention of clearing the loan before term (every 80% of premiums paid in advance eliminates 11 instalments (direct savings)
Wish me luck
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Rank: User Joined: 1/20/2014 Posts: 3,528
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kiwaru wrote:Just paid the first instalment into a 25 year old home loan (aka slow death). My reasons for going into mortgage:
1. Peace of mind... since my family must live somewhere, it had better be in MY HOUSE
2. Expense savings: initially an oxy-moron since 96% of the premiums go to interest payment. But the mortgage is 150% of the rent for that hse after raising 15%.
In my previous house I noticed that rent had doubled in about 5 years. So I am thinking long term here
3. Capital appreciation: with the estimated 12% annual capital appreciation, I am building equity that am living in, and I can tap into for whatever
Disclaimer: I am praying to God and i have every intention of clearing the loan before term (every 80% of premiums paid in advance eliminates 11 instalments (direct savings)
Wish me luck There is the catch. Manage that well and you will be home and dry! you also need to try hard to bring it to over 50% of repayment going towards paying the loan principal not interest! Formal education will make you a living. Self-education will make you a fortune - Jim Rohn.
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Rank: Elder Joined: 5/25/2012 Posts: 4,105 Location: 08c
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obiero wrote:dunkang wrote:kamaug wrote:Mortgage isn't working for me... I feel that the bank is taking a hard line especially since the split of interest and principle is 93%!! which means if my instalment is 100k 93k is interest only 7k is principle. My Business has hit some headwinds but the bank isn’t having any of that. Any valuable advice would be welcome. JUST SELL IT!!! Woke up at 5.35am today js thinkin of my home debt. I dont like to call it mortgage since I found out that the word means 'death grip' in latin @obiero why loose sleep over small matters (judging from post #108 Posted : Wednesday, August 07, 2013 7:39:26 PM RINKobiero wrote:
I bet all my shares in BoK, COOP, KQ, land in Kitengela, Kakamega, Kisii, house, hotel and two cars; that KCB will not report a profit higher than 7%up from the KES 8.5B of H1 2012..
Pesa Nane plans to be shilingi when he grows up.
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Rank: Elder Joined: 6/23/2009 Posts: 13,519 Location: nairobi
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Pesa Nane wrote:obiero wrote:dunkang wrote:kamaug wrote:Mortgage isn't working for me... I feel that the bank is taking a hard line especially since the split of interest and principle is 93%!! which means if my instalment is 100k 93k is interest only 7k is principle. My Business has hit some headwinds but the bank isn’t having any of that. Any valuable advice would be welcome. JUST SELL IT!!! Woke up at 5.35am today js thinkin of my home debt. I dont like to call it mortgage since I found out that the word means 'death grip' in latin @obiero why loose sleep over small matters (judging from post #108 Posted : Wednesday, August 07, 2013 7:39:26 PM RINKobiero wrote:
I bet all my shares in BoK, COOP, KQ, land in Kitengela, Kakamega, Kisii, house, hotel and two cars; that KCB will not report a profit higher than 7%up from the KES 8.5B of H1 2012..
Haha. Pesanane wewe ni mtu hatari.. I wrote that ages ago.. Anyways, it is common knowledge to most that I am not a poor man, far from it..
HF 90,000 ABP 3.83; KQ 414,100 ABP 7.92; MTN 23,800 ABP 6.45
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Rank: Elder Joined: 6/23/2009 Posts: 13,519 Location: nairobi
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kasibitta wrote:obiero wrote:dunkang wrote:kamaug wrote:Mortgage isn't working for me... I feel that the bank is taking a hard line especially since the split of interest and principle is 93%!! which means if my instalment is 100k 93k is interest only 7k is principle. My Business has hit some headwinds but the bank isn’t having any of that. Any valuable advice would be welcome. JUST SELL IT!!! Woke up at 5.35am today js thinkin of my home debt. I dont like to call it mortgage since I found out that the word means 'death grip' in latin @Obiero...i actually thought 'mortgage' is a french word for slow death. @kasibiita.. it is true.. we are both right. latin and french both point to the fact that a death grip shall result in ones slow death. someone asked me to show then just one person who has ever cleared a mortgage!!! I found none..
HF 90,000 ABP 3.83; KQ 414,100 ABP 7.92; MTN 23,800 ABP 6.45
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Rank: Elder Joined: 5/27/2008 Posts: 3,760
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kiwaru wrote:Just paid the first instalment into a 25 year old home loan (aka slow death). My reasons for going into mortgage:
1. Peace of mind... since my family must live somewhere, it had better be in MY HOUSE
2. Expense savings: initially an oxy-moron since 96% of the premiums go to interest payment. But the mortgage is 150% of the rent for that hse after raising 15%.
In my previous house I noticed that rent had doubled in about 5 years. So I am thinking long term here
3. Capital appreciation: with the estimated 12% annual capital appreciation, I am building equity that am living in, and I can tap into for whatever
Disclaimer: I am praying to God and i have every intention of clearing the loan before term (every 80% of premiums paid in advance eliminates 11 instalments (direct savings)
Wish me luck 4. Mortgage has inbuilt life insurance, if you croak then Mr/Mrs Kiwaru and kids are assured of a fully paid house....
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Rank: Veteran Joined: 10/9/2006 Posts: 1,502
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I will hesitate committing myself to an apartment mortgage. work to prosper
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Rank: Member Joined: 5/14/2014 Posts: 288 Location: nairobi
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being in debt for 25 years is slavery.not good for health I find satisfaction in owning great business,not trading them
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Rank: Elder Joined: 6/23/2009 Posts: 13,519 Location: nairobi
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Tokyo wrote:I will hesitate committing myself to an apartment mortgage. 48% of new houses being built in Kenya are now apartments. So long as u dont buy above 1st floor, its fine.. So that as you age u may still make it up those flights!!
HF 90,000 ABP 3.83; KQ 414,100 ABP 7.92; MTN 23,800 ABP 6.45
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Rank: Member Joined: 10/19/2009 Posts: 671 Location: Nairobi
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Othelo wrote:kiwaru wrote:Just paid the first instalment into a 25 year old home loan (aka slow death). My reasons for going into mortgage:
1. Peace of mind... since my family must live somewhere, it had better be in MY HOUSE
2. Expense savings: initially an oxy-moron since 96% of the premiums go to interest payment. But the mortgage is 150% of the rent for that hse after raising 15%.
In my previous house I noticed that rent had doubled in about 5 years. So I am thinking long term here
3. Capital appreciation: with the estimated 12% annual capital appreciation, I am building equity that am living in, and I can tap into for whatever
Disclaimer: I am praying to God and i have every intention of clearing the loan before term (every 80% of premiums paid in advance eliminates 11 instalments (direct savings)
Wish me luck There is the catch. Manage that well and you will be home and dry! you also need to try hard to bring it to over 50% of repayment going towards paying the loan principal not interest! Question: Do Banks usually allow "irregular" topups to your monthly payments, so that more principal is returned earlier? Say, month 1 you pay as usual. Then month two, you pay twice ur monthly figure etc etc? Or only lump sums can be used to reduce Principal figure. I know Saccos can be flexible. But Banks?
Life is joy, death is peace, but the transition is very difficult.
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Is Taking a Mortgage the WORST Decision Ever??
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