Wazua
»
Investor
»
Property
»
Is Taking a Mortgage the WORST Decision Ever??
Rank: Elder Joined: 12/25/2014 Posts: 2,301 Location: kenya
|
UpcomingPaperChaser wrote:TPK wrote:UpcomingPaperChaser wrote:TPK wrote:Swenani 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. why do I find that to hard to believe? 12kms within CBD and the hs(mainsonnette) is currently going for 14M? Is that cost inclusive of the land acquisition ama you just buy the hse and carry it to your own plot? yes, in fact it is 11kms to be precise. The plots are not that big about 70 by 40 and about 300 m off Msa road. The cost of the plot in Jan 2010 when I bought it was 2.7 M and I used the balance of 4.3 M to construct. His story seems to make some sense........a 4 bed maisonette with a SQ for 4.3 is possible, considering several factors. Maybe the building isnt of extremely classy finishes as they are so costly. Secondly, maybe he never used a contractor to build, but rather, he was the site supervisor himself. The other thing is that maybe he had his own old pick up for transporting all the building materials to the site. I agree. But issue ni how you settled the 7 million loan!! the lumpsum you talk about maybe was one major lumpsum, of say 1 million!!! but normally.........i know life must have been so hard for you!! You could no even afford to visit Karumaindo on Friday evenings! I used an experienced foreman (he had to show me 4 other similar houses he had done) and we agreed on a daily rate. I was the one to source and supply him with materials. I did not want to engage a contractor as they tend to hurry and compromise quality. A daily rate ensured that he was assured of a job for about 5 months (the time it took to finish construction)so he could focus on quality works. Life was tough (but not very) since I Could occassionally take my Friday Tusker and take Missus and kids out for dinner  . All in all, congratulations for that achievement. its no mean feat........enjoy life free from the landlord!! 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? Also what bank is this you used who didn't slap you with interest rates hikes the way they felt like? There are some wazuans who wanted to know what's the most sensible and reasonable bank to take a mortgage with in kenya . Thanks
|
|
|
Rank: Elder Joined: 3/2/2009 Posts: 26,331 Location: Masada
|
TPK wrote:UpcomingPaperChaser wrote:Congrats for your development.........how were the six years that you would pay up to 100k as installments? i guess the most horrible years of your life, what would have happened assuming you died before finishing the loan repayment? all in all......cheers!! These were the most challenging times of my life so far - you have to kazana like crazy to prepay. No non-essential expenditure. Kuscco requires you to take a life assurance policy so in case am not there the insurance company pays the loan balance. After you expire and the life assurer pays the balance of the loan, will the house then be given to your next of kin or who takes the house? Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
|
|
|
Rank: Elder Joined: 12/25/2014 Posts: 2,301 Location: kenya
|
Impunity wrote:TPK wrote:UpcomingPaperChaser wrote:Congrats for your development.........how were the six years that you would pay up to 100k as installments? i guess the most horrible years of your life, what would have happened assuming you died before finishing the loan repayment? all in all......cheers!! These were the most challenging times of my life so far - you have to kazana like crazy to prepay. No non-essential expenditure. Kuscco requires you to take a life assurance policy so in case am not there the insurance company pays the loan balance. After you expire and the life assurer pays the balance of the loan, will the house then be given to your next of kin or who takes the house? That's the cycle of life bro. Even bill Gates will leave all his wealth for someone/ foundation who never sweat for it . You never go with anything back to soil .he he
|
|
|
Rank: Elder Joined: 3/2/2009 Posts: 26,331 Location: Masada
|
TPK wrote:dunkang wrote:UpcomingPaperChaser wrote:Congrats for your development.........how were the six years that you would pay up to 100k as installments? i guess the most horrible years of your life, what would have happened assuming you died before finishing the loan repayment? all in all......cheers!! Boss, that guy has either given us half info or lied to us. If you repay the KShs. 7,000,000.00 at 14% p.a interest rate and 6 years, the instalments will be KShs. 144,240.18. You did not read my first message carefully. If you are prepaying the loan, then you should not assume the repayment of principal is constant when determining total amount paid. I think the loans, whether on a reducing balance or fixed is calculated so that every month you only pay a fixed sum of money...ama ni nini sielewi? Lets say the monthly calculated remittance was Kes. 95,000, then after the 3rd year you won the Bonyeza Osinde na Safcon worth Kes. 2 million, will the monthly rate now be lowered for say 65K pm payable for the remainder 12 years or you continue paying the monthly 95K but for say 6 years and finish? Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
|
|
|
Rank: Elder Joined: 3/2/2009 Posts: 26,331 Location: Masada
|
enyands wrote:Impunity wrote:TPK wrote:UpcomingPaperChaser wrote:Congrats for your development.........how were the six years that you would pay up to 100k as installments? i guess the most horrible years of your life, what would have happened assuming you died before finishing the loan repayment? all in all......cheers!! These were the most challenging times of my life so far - you have to kazana like crazy to prepay. No non-essential expenditure. Kuscco requires you to take a life assurance policy so in case am not there the insurance company pays the loan balance. After you expire and the life assurer pays the balance of the loan, will the house then be given to your next of kin or who takes the house? That's the cycle of life bro. Even bill Gates will leave all his wealth for someone/ foundation who never sweat for it . You never go with anything back to soil .he he Then in that case thats a very dangerous precedent...no wonder Kiambu women have been taking their huzzies to Makueni year in year out! Like if she know you have mortgaged a 40 million home in the deep Karen near kina RAO and RUTO, and that you intend to pay for the next 25 years, and that she is the next of kin, and that you have already given her 2 lovely kids (with education policy), and that you intend to have them eating mboga and njahi and turungi for the next 25 years, and that you dont have any other floating income to invest in other cash generating activities... SHE WILL MAKUENI YOU ON THE 2ND YEAR AND LIVE POSHLY IN KAREN!!!Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
|
|
|
Rank: New-farer Joined: 4/8/2015 Posts: 42
|
Impunity wrote:TPK wrote:dunkang wrote:UpcomingPaperChaser wrote:Congrats for your development.........how were the six years that you would pay up to 100k as installments? i guess the most horrible years of your life, what would have happened assuming you died before finishing the loan repayment? all in all......cheers!! Boss, that guy has either given us half info or lied to us. If you repay the KShs. 7,000,000.00 at 14% p.a interest rate and 6 years, the instalments will be KShs. 144,240.18. You did not read my first message carefully. If you are prepaying the loan, then you should not assume the repayment of principal is constant when determining total amount paid. I think the loans, whether on a reducing balance or fixed is calculated so that every month you only pay a fixed sum of money...ama ni nini sielewi? Lets say the monthly calculated remittance was Kes. 95,000, then after the 3rd year you won the Bonyeza Osinde na Safcon worth Kes. 2 million, will the monthly rate now be lowered for say 65K pm payable for the remainder 12 years or you continue paying the monthly 95K but for say 6 years and finish? @impunity The purpose of early repayment is to shorten the mortgage repayment period and reduce the overall cost. So a boost of 2m will not change the monthly repayments but will significantly reduce the total interest paid. In effect, the 2m is no longer being charged interest so you have "savings" of 14% of 2m = 280k p.a "accumulated" for the remaining duration of the loan
|
|
|
Rank: Elder Joined: 7/22/2009 Posts: 7,855
|
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!!! Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
|
|
|
Rank: Elder Joined: 7/11/2010 Posts: 5,040
|
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!!! He said even 100k. Meaning those were the least "lumpsums" he paid. Meaning most other times it was more. It's possible what he did, you just need a good income and financial discipline The investor's chief problem - and even his worst enemy - is likely to be himself
|
|
|
Rank: Member Joined: 1/20/2015 Posts: 489 Location: Nairobi
|
To make sense out of this, maybe he tells us how much his disposable income was before the loan! Enjoy every moment of your life, you never know when your time will come.
|
|
|
Rank: Elder Joined: 12/25/2014 Posts: 2,301 Location: kenya
|
@tpk kindlt what bank did you use . I want to go talk to them
|
|
|
Wazua
»
Investor
»
Property
»
Is Taking a Mortgage the WORST Decision Ever??
Forum Jump
You cannot post new topics in this forum.
You cannot reply to topics in this forum.
You cannot delete your posts in this forum.
You cannot edit your posts in this forum.
You cannot create polls in this forum.
You cannot vote in polls in this forum.
|