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Is Taking a Mortgage the WORST Decision Ever??
Rank: Elder Joined: 12/7/2012 Posts: 11,935
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Aguytrying 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!!! 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 Makes for financial discipline & streamlines likages!!! In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
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Rank: Elder Joined: 7/22/2009 Posts: 7,840
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@Aguy - The problem is that this is a serious forum and decisions are normally made based on information obtained. The truth of the matter is that if he was paying the 100k he is quoting it would take him 12 years. He is quoting 6 years!! This is impossible and makes the whole story useless. He has quoted very specific figures on everything. Let him say how much he was paying per month to pay off the debt in 6 years. Alternatively he states how long it took him to pay the loan and stop hoodwinking wazuans. 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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Rank: Member Joined: 8/17/2007 Posts: 294
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MaichBlack wrote:@Aguy - The problem is that this is a serious forum and decisions are normally made based on information obtained.
The truth of the matter is that if he was paying the 100k he is quoting it would take him 12 years. He is quoting 6 years!! This is impossible and makes the whole story useless. He has quoted very specific figures on everything. Let him say how much he was paying per month to pay off the debt in 6 years. Alternatively he states how long it took him to pay the loan and stop hoodwinking wazuans. The guy is obviously not an employee with a fixed low income.. He's in business or farming and he gets bursts of money once in a while, say 400k which he uses to knock off the loan
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Rank: Elder Joined: 12/7/2012 Posts: 11,935
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instinct wrote:MaichBlack wrote:@Aguy - The problem is that this is a serious forum and decisions are normally made based on information obtained.
The truth of the matter is that if he was paying the 100k he is quoting it would take him 12 years. He is quoting 6 years!! This is impossible and makes the whole story useless. He has quoted very specific figures on everything. Let him say how much he was paying per month to pay off the debt in 6 years. Alternatively he states how long it took him to pay the loan and stop hoodwinking wazuans. The guy is obviously not an employee with a fixed low income.. He's in business or farming and he gets bursts of money once in a while, say 400k which he uses to knock off the loan @MB you misinterpreted his 100k repayment. Just reread that post. In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
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Rank: Member Joined: 5/31/2009 Posts: 226
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Mortgages works wonders. The one thing it does is that it holds down the price of the property as we all know prices keep doubling every 3years. The average price of a 3bedroom apartment in a decent place like Mombasa rd ruiru ,kikuyu, Thika is 7m up from 3.5m in 2011 A 3 bedroom town house in same area has shot up from 8m in 2011 to 13m now. I bought my apartment june 2014 for 4.25m of which i borrowed only 2.25m. I paid 400k as closing costs i have managed to pay 3 lumpsums of 450 500 and 350 in addition to the 40kx15years every month. Bal is now 790k. Not every 1 can afford the lumpsups but even if you just buy the house and loose your job in year 3 or 4 u can still sell it and get a cool 2m-4m profit and use it to build a house or start a business. Fyi the apartment can now fetch 5.5m quick sale
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Rank: Veteran Joined: 11/15/2013 Posts: 1,977 Location: Here
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instinct wrote:MaichBlack wrote:@Aguy - The problem is that this is a serious forum and decisions are normally made based on information obtained.
The truth of the matter is that if he was paying the 100k he is quoting it would take him 12 years. He is quoting 6 years!! This is impossible and makes the whole story useless. He has quoted very specific figures on everything. Let him say how much he was paying per month to pay off the debt in 6 years. Alternatively he states how long it took him to pay the loan and stop hoodwinking wazuans. The guy is obviously not an employee with a fixed low income.. He's in business or farming and he gets bursts of money once in a while, say 400k which he uses to knock off the loan Let's assume he's paying 100k monthly so for 6yrs its 7.2 M.Balance is 3M which if equally spread over 6yrs is 500k annually (60k monthly) or whichever periodically. So the question is was he straining? Did he have an alternative of buying plot then constructing without a mortgage? Was the decision he made worse compared to other options? Personally i think He paid through his nose. Lazima Ilikuwa anakunywa maji na mahindi. It wasn't the better decision. Everybody STEALS, a THIEF is one who's CAUGHT stealing something of LITTLE VALUE. !!!
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Rank: Veteran Joined: 8/25/2012 Posts: 1,826
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instinct wrote:MaichBlack wrote:@Aguy - The problem is that this is a serious forum and decisions are normally made based on information obtained.
The truth of the matter is that if he was paying the 100k he is quoting it would take him 12 years. He is quoting 6 years!! This is impossible and makes the whole story useless. He has quoted very specific figures on everything. Let him say how much he was paying per month to pay off the debt in 6 years. Alternatively he states how long it took him to pay the loan and stop hoodwinking wazuans. The guy is obviously not an employee with a fixed low income.. He's in business or farming and he gets bursts of money once in a while, say 400k which he uses to knock off the loan since he has not specified, we can just speculate, but he might be an employee. I don't know if the figures are correct but he states that he has paid in total around 10m in 6 years, translates to roughly 140k per month. assuming he was not on complete lockdown since he mentions taking the missus and the kids out, also assuming there are other bills, he could well be employed with a net of around 200k which is more common these days in Nairobi. or if he was following the 1/3 rule, that leaves him at around a net of 220k which is still very possible, especially if he works for the UN.
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Rank: Member Joined: 10/26/2008 Posts: 380
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TPK has clearly stated he finished it in 6 years, instead of 15 years. This is very possible, he has stated he made lumpsum payments which allowed him to fast track the loan. Now speculation is on whether he is an employee of UN and what his salary is, e.t.c. which does not add value to this discussion.
It is very possible to fast track those mortgages. I know of a family who cleared their mortgage in 4 years instead of 10 years. The family would put any money earned elsewhere into the mortgage, any bonus, any perdiem (however small, even 20-40K), money from raises at work place and it worked well.
The fact that you may not be in a position to fast track your mortgage, doesn't mean that others cannot. Its very much possible, give TPK a break. I think he has done well to explain his circumstances, and the info he gave matches.
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Rank: Veteran Joined: 11/15/2013 Posts: 1,977 Location: Here
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Mkimwa wrote:TPK has clearly stated he finished it in 6 years, instead of 15 years. This is very possible, he has stated he made lumpsum payments which allowed him to fast track the loan. Now speculation is on whether he is an employee of UN and what his salary is, e.t.c. which does not add value to this discussion.
It is very possible to fast track those mortgages. I know of a family who cleared their mortgage in 4 years instead of 10 years. The family would put any money earned elsewhere into the mortgage, any bonus, any perdiem (however small, even 20-40K), money from raises at work place and it worked well.
The fact that you may not be in a position to fast track your mortgage, doesn't mean that others cannot. Its very much possible, give TPK a break. I think he has done well to explain his circumstances, and the info he gave matches. That first one means six years of total sacrifice  The second one is a reality   . The mortgage makes sense if you're able to fast track payments in shortest period possible, I think 5yrs is ideal. But again other options should be considered. Everybody STEALS, a THIEF is one who's CAUGHT stealing something of LITTLE VALUE. !!!
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Rank: Elder Joined: 3/18/2011 Posts: 12,069 Location: Kianjokoma
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TPK paid an amount P= x(loan repayment)+y(lumpsum, at least 100k) The guy needs to tell us what x is per month to settle this debate
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Is Taking a Mortgage the WORST Decision Ever??
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