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Is Taking a Mortgage the WORST Decision Ever??
Rank: Veteran Joined: 11/21/2006 Posts: 1,590
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Reading thru the thread, its clear that most of us were green when we took our first mortgage hence some nasty experiences or surprises. Was speaking to a banker the other day and almost all the ongoing private developments in Nai currently are 90-100% financed by the banks. Kwani private developers ni wajinga? Sehemu ndio nyumba
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Rank: Elder Joined: 11/27/2007 Posts: 3,604
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Mainat wrote:Reading thru the thread, its clear that most of us were green when we took our first mortgage hence some nasty experiences or surprises.
Was speaking to a banker the other day and almost all the ongoing private developments in Nai currently are 90-100% financed by the banks.
Kwani private developers ni wajinga?
Sio wajinga. Take a mortgage but ensure in 3 years it's regenerating income that helps repay it. Taking one for residential use does not make sense, citing from the computation done above. Most of the cost of mortgage is the interest on the money so the longer one takes in repaying the less lucrative is and the higher the interest rate the worse the damage to your pocket African parents don't know how to say sorry.. the closest you will get to a sorry is a 'have you eaten'
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Rank: Veteran Joined: 11/21/2006 Posts: 1,590
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The 25% pa return is highly erroneous. Most fund managers actually use the t-bill rate as a reference pt which means say 10%. At any rate, your money, you manage how you want. Sober wrote:Mainat wrote:Reading thru the thread, its clear that most of us were green when we took our first mortgage hence some nasty experiences or surprises.
Was speaking to a banker the other day and almost all the ongoing private developments in Nai currently are 90-100% financed by the banks.
Kwani private developers ni wajinga?
Sio wajinga. Take a mortgage but ensure in 3 years it's regenerating income that helps repay it. Taking one for residential use does not make sense, citing from the computation done above. Most of the cost of mortgage is the interest on the money so the longer one takes in repaying the less lucrative is and the higher the interest rate the worse the damage to your pocket Sehemu ndio nyumba
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Rank: Veteran Joined: 11/15/2013 Posts: 1,977 Location: Here
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Mainat wrote:The 25% pa return is highly erroneous. Most fund managers actually use the t-bill rate as a reference pt which means say 10%. At any rate, your money, you manage how you want. Sober wrote:Mainat wrote:Reading thru the thread, its clear that most of us were green when we took our first mortgage hence some nasty experiences or surprises.
Was speaking to a banker the other day and almost all the ongoing private developments in Nai currently are 90-100% financed by the banks.
Kwani private developers ni wajinga?
Sio wajinga. Take a mortgage but ensure in 3 years it's regenerating income that helps repay it. Taking one for residential use does not make sense, citing from the computation done above. Most of the cost of mortgage is the interest on the money so the longer one takes in repaying the less lucrative is and the higher the interest rate the worse the damage to your pocket Am one person who likes numbers too,even with 8% p.a interest the investment is superb. So @Mainat replace 25% with your 10% and give us the FV of that cash or @Maichb do it for us we see the reality Everybody STEALS, a THIEF is one who's CAUGHT stealing something of LITTLE VALUE. !!!
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Rank: Veteran Joined: 11/21/2006 Posts: 1,590
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Two or three other points to be borne in mind. Firstly if its was your intention to leave in area where houses cost Ksh10m. A Ksh10m house in Nai today will get you a rent of 45-55k. So if you decide that you can buy, but you'll rent, its not 100k you'll save. Rental increases. This is of course money you write off. Even a house renting for 31k today will be renting for 100k in 5 years time Time value of money. Finally, who said you have to pay the mortgage for 20yrs? Boris Boyka wrote:Mainat wrote:The 25% pa return is highly erroneous. Most fund managers actually use the t-bill rate as a reference pt which means say 10%. At any rate, your money, you manage how you want. Sober wrote:Mainat wrote:Reading thru the thread, its clear that most of us were green when we took our first mortgage hence some nasty experiences or surprises.
Was speaking to a banker the other day and almost all the ongoing private developments in Nai currently are 90-100% financed by the banks.
Kwani private developers ni wajinga?
Sio wajinga. Take a mortgage but ensure in 3 years it's regenerating income that helps repay it. Taking one for residential use does not make sense, citing from the computation done above. Most of the cost of mortgage is the interest on the money so the longer one takes in repaying the less lucrative is and the higher the interest rate the worse the damage to your pocket Am one person who likes numbers too,even with 8% p.a interest the investment is superb. So @Mainat replace 25% with your 10% and give us the FV of that cash or @Maichb do it for us we see the reality Sehemu ndio nyumba
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Rank: Veteran Joined: 11/15/2013 Posts: 1,977 Location: Here
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Mainat wrote:Two or three other points to be borne in mind. Firstly if its was your intention to leave in area where houses cost Ksh10m. A Ksh10m house in Nai today will get you a rent of 45-55k. So if you decide that you can buy, but you'll rent, its not 100k you'll save. Rental increases. This is of course money you write off. Even a house renting for 31k today will be renting for 100k in 5 years time Time value of money. Finally, who said you have to pay the mortgage for 20yrs? Boris Boyka wrote:Mainat wrote:The 25% pa return is highly erroneous. Most fund managers actually use the t-bill rate as a reference pt which means say 10%. At any rate, your money, you manage how you want. Sober wrote:Mainat wrote:Reading thru the thread, its clear that most of us were green when we took our first mortgage hence some nasty experiences or surprises.
Was speaking to a banker the other day and almost all the ongoing private developments in Nai currently are 90-100% financed by the banks.
Kwani private developers ni wajinga?
Sio wajinga. Take a mortgage but ensure in 3 years it's regenerating income that helps repay it. Taking one for residential use does not make sense, citing from the computation done above. Most of the cost of mortgage is the interest on the money so the longer one takes in repaying the less lucrative is and the higher the interest rate the worse the damage to your pocket Am one person who likes numbers too,even with 8% p.a interest the investment is superb. So @Mainat replace 25% with your 10% and give us the FV of that cash or @Maichb do it for us we see the reality You are now taking us back to Egypt!!!!  i thought you had something new? on # 493 you termed 25% erronious so to correct the error you proposed 10%.Either way calculate using 10% . Those values will be important for us to compare vs your Future rents. talking of time value ooh future value without a refference figure is useless. Everybody STEALS, a THIEF is one who's CAUGHT stealing something of LITTLE VALUE. !!!
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Rank: Veteran Joined: 9/18/2014 Posts: 1,127
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Boris Boyka wrote:Mainat wrote:Two or three other points to be borne in mind. Firstly if its was your intention to leave in area where houses cost Ksh10m. A Ksh10m house in Nai today will get you a rent of 45-55k. So if you decide that you can buy, but you'll rent, its not 100k you'll save. Rental increases. This is of course money you write off. Even a house renting for 31k today will be renting for 100k in 5 years time Time value of money. Finally, who said you have to pay the mortgage for 20yrs? Boris Boyka wrote:Mainat wrote:The 25% pa return is highly erroneous. Most fund managers actually use the t-bill rate as a reference pt which means say 10%. At any rate, your money, you manage how you want. Sober wrote:Mainat wrote:Reading thru the thread, its clear that most of us were green when we took our first mortgage hence some nasty experiences or surprises.
Was speaking to a banker the other day and almost all the ongoing private developments in Nai currently are 90-100% financed by the banks.
Kwani private developers ni wajinga?
Sio wajinga. Take a mortgage but ensure in 3 years it's regenerating income that helps repay it. Taking one for residential use does not make sense, citing from the computation done above. Most of the cost of mortgage is the interest on the money so the longer one takes in repaying the less lucrative is and the higher the interest rate the worse the damage to your pocket Am one person who likes numbers too,even with 8% p.a interest the investment is superb. So @Mainat replace 25% with your 10% and give us the FV of that cash or @Maichb do it for us we see the reality You are now taking us back to Egypt!!!! i thought you had something new? on # 493 you termed 25% erronious so to correct the error you proposed 10%.Either way calculate using 10% . Those values will be important for us to compare vs your Future rents. talking of time value ooh future value without a refference figure is useless. @mainat you can't achieve a rental increase from 31k to 100k in 5 years in the Kenyan market as currently constituted. The annual rent escalation ranges from 5-10% for residential units with commercial property preferring biannual increase of atmost 20%. The main purpose of the stock market is to make fools of as many people as possible.
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Rank: Veteran Joined: 2/2/2012 Posts: 1,134 Location: Nairobi
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I have observed that those who proclaim that mortgages are bad fall into one of two groups:
GROUP 1:- those who have never taken a mortgage in their lives
GROUP 2:- those who took a mortgage and defaulted on payments
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Rank: Veteran Joined: 11/15/2013 Posts: 1,977 Location: Here
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chiaroscuro wrote:I have observed that those who proclaim that mortgages are bad fall into one of two groups:
GROUP 1:- those who have never taken a mortgage in their lives
GROUP 2:- those who took a mortgage and defaulted on payments
to complete the statements 1.......... and have a house they built or bought. 2............the bank NEVER compromised regardless of situation and the fellows lost terribly. Everybody STEALS, a THIEF is one who's CAUGHT stealing something of LITTLE VALUE. !!!
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Rank: New-farer Joined: 4/8/2015 Posts: 42
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Boris Boyka wrote:chiaroscuro wrote:I have observed that those who proclaim that mortgages are bad fall into one of two groups:
GROUP 1:- those who have never taken a mortgage in their lives
GROUP 2:- those who took a mortgage and defaulted on payments
to complete the statements 1.......... and have a house they built or bought. 2............the bank NEVER compromised regardless of situation and the fellows lost terribly. A bad workman quarrels with his tools, and a mortgage is just a tool. Na Yesu alisema in Luke 14:28 kwamba ""Suppose one of you wants to build a tower. Won't you first sit down and estimate the cost to see if you have enough money to complete it?"
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Is Taking a Mortgage the WORST Decision Ever??
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