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Is Taking a Mortgage the WORST Decision Ever??
Rank: Elder Joined: 12/17/2009 Posts: 3,583 Location: Kenya
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you wait till 40-50 to get a big house only to realize you are alone in the house, while your kids are seeking independence in bed-sitters huko nairobi west ama githurai, or are tucked in a boarding school for the better part of the year.
This has been mentioned before, but there are sentiments attached to a house, treating it as an investment is not prudent.
If you can afford, at least give your kids space as they grow, give them some place to identify with.
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Rank: Elder Joined: 7/22/2009 Posts: 7,838
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Angelica _ann wrote:@MB & #anti mortgage, there are people who have done it successfully. Leverage. Most men can't buy anything unless you pressurize them   Wacha kuharibiwa wanaume jina. Men are very be good at buying stuff. The only stuff they might refuse to buy are things like 4 door fridges and Nigerian style leather seats while there is a plot on offer! Ama ulipatana na kabaya?? 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: Elder Joined: 3/18/2011 Posts: 12,069 Location: Kianjokoma
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Impunity wrote:Museveni wrote:Found this relevant: Buying or building a house before age 40 is a MISTAKE.Quote:My friends and I have been saving money together to build our own houses. However, after a lot of soul searching and consultation, I have come to the realization that building or buying my own house is not a priority at least till I turn about 40.
Let’s take arbitrary incomes and see what can be achieved at the respective ages
Age. Net pay kshs. Family
25. 50,000. Single
30. 100,000. New wed
35. 150,000. 1Kid
40. 200,000. 2, 3 kids
If you take a mortgage or construction loan before you turn 40, you might buy a house or build a house that might prove to be a liability.
What if I already have the cash, am not taking a loan? Don’t buy the house just yet…. Use your money to make more money, don’t bury it in an immovable asset.
So, what to do?
Buy a parcel of land, like 5 acres and plant trees. Harvest the trees every 10 years and sell them as timber. One acre can hold about 2000 trees. Five acres will hold about 10,000 trees. If half of the trees die and sell the other half at Kshs 5,000 per tree, you will make about 5,000 trees x Kshs 5000 = 25 million. Surely, you can get a very decent house with 25 million.
Perfect! Though I read this a couple of years ago, still very relevant! which trees are these?? 2000 trees per acre?
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Rank: Elder Joined: 12/25/2014 Posts: 2,301 Location: kenya
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Lolest! wrote:Impunity wrote:Museveni wrote:Found this relevant: Buying or building a house before age 40 is a MISTAKE.Quote:My friends and I have been saving money together to build our own houses. However, after a lot of soul searching and consultation, I have come to the realization that building or buying my own house is not a priority at least till I turn about 40.
Let’s take arbitrary incomes and see what can be achieved at the respective ages
Age. Net pay kshs. Family
25. 50,000. Single
30. 100,000. New wed
35. 150,000. 1Kid
40. 200,000. 2, 3 kids
If you take a mortgage or construction loan before you turn 40, you might buy a house or build a house that might prove to be a liability.
What if I already have the cash, am not taking a loan? Don’t buy the house just yet…. Use your money to make more money, don’t bury it in an immovable asset.
So, what to do?
Buy a parcel of land, like 5 acres and plant trees. Harvest the trees every 10 years and sell them as timber. One acre can hold about 2000 trees. Five acres will hold about 10,000 trees. If half of the trees die and sell the other half at Kshs 5,000 per tree, you will make about 5,000 trees x Kshs 5000 = 25 million. Surely, you can get a very decent house with 25 million.
Perfect! Though I read this a couple of years ago, still very relevant! which trees are these?? 2000 trees per acre? Rather let's narrow down , what should be the spacing between one tree and another one feet or two feet ?
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Rank: Member Joined: 1/20/2015 Posts: 489 Location: Nairobi
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It also depends with the area....you cannot grow eucalyptus or cypress and expect them to grow and become so big in Kitengela......the climatic conditions of an area determines a lot. Enjoy every moment of your life, you never know when your time will come.
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Rank: Elder Joined: 2/16/2007 Posts: 2,114
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UpcomingPaperChaser wrote:It also depends with the area....you cannot grow eucalyptus or cypress and expect them to grow and become so big in Kitengela......the climatic conditions of an area determines a lot. Sub-surface rock as well..
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Rank: Member Joined: 2/18/2011 Posts: 448
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Mseto binti 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!!! @ Maich black unajua hesabu...nice I need help kuelewa hesabu za maloan! am wondering about my own hesabu in regard to a loan am servicing..tafadhali saidia...(munduzcatgmail.com   @Maich et al, TPK gave his real experience. KUSCO gives a Ksh 7 Million loan at 14% p.a resulting in monthly payment of 93,222. You also get the 7 million based on a multiple of 5 times your savings meaning TPK already had approximately 1.4 Million in cash with KUSCO which also earns an annual dividend (5-10%) over the 6 years. Links below on SOP of the loan and pricing. http://www.kuscco.com/in...php/kuscco-housing-fund
http://www.kuscco.com/in...php/kuscco-housing-fund
While he was non specific on how many lumpsum payments he made over the six years period( I choose to look at the 100K lumpsum payment as just one example),it is quite possible he paid it all in 6 years as follows: 93,222 per month for 6 months = 6,711,984Using of cash deposit to settle balance= 1,400,00Lumpsum (extra) payments amounting to = 1,888,016 in 6 years or 314,670 per annum over the six years or 26,223 extra per month over the 6 years (72 months) he took to clear the loan. PS: I have not included earnings from dividends from the Ksh 1.4 Million saved which would be at least 70k p.a for each of the 6 years (420K in total) All these are assumptions but TPK demonstrated he did this practically although he chose not to give specifics on the payments. TPK i salute you for sharing your story on an efficient and smart way to overcome the crazy interest rates and get value for money.
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Rank: Member Joined: 10/16/2006 Posts: 21
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MaichBlack wrote:@vin and @Lolest - See post# 318 in this thread. I got into into Co-op at 16/= levels. I am now approximately 40% and it's not even a year yet!I also got into CFC in the 40's level. Now that is currently worth 135 + 22.75 (CFC Stanbic + CFC Insurance Holdings) = 157.75/= This is approximately 250% returns to date.. Annualized, this would be in excess of 50% returns annually!!!Never mind I added some more at 33/= during the rights issue. I am just wondering how the investment is doing. We may not be talking about the same if you never took the profits at the righ time.
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Rank: Elder Joined: 12/25/2014 Posts: 2,301 Location: kenya
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mibbz wrote:Mseto binti 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!!! @ Maich black unajua hesabu...nice I need help kuelewa hesabu za maloan! am wondering about my own hesabu in regard to a loan am servicing..tafadhali saidia...(munduzcatgmail.com @Maich et al, TPK gave his real experience. KUSCO gives a Ksh 7 Million loan at 14% p.a resulting in monthly payment of 93,222. You also get the 7 million based on a multiple of 5 times your savings meaning TPK already had approximately 1.4 Million in cash with KUSCO which also earns an annual dividend (5-10%) over the 6 years. Links below on SOP of the loan and pricing. http://www.kuscco.com/in...php/kuscco-housing-fund
http://www.kuscco.com/in...php/kuscco-housing-fund
While he was non specific on how many lumpsum payments he made over the six years period( I choose to look at the 100K lumpsum payment as just one example),it is quite possible he paid it all in 6 years as follows: 93,222 per month for 6 months = 6,711,984Using of cash deposit to settle balance= 1,400,00Lumpsum (extra) payments amounting to = 1,888,016 in 6 years or 314,670 per annum over the six years or 26,223 extra per month over the 6 years (72 months) he took to clear the loan. PS: I have not included earnings from dividends from the Ksh 1.4 Million saved which would be at least 70k p.a for each of the 6 years (420K in total) All these are assumptions but TPK demonstrated he did this practically although he chose not to give specifics on the payments. TPK i salute you for sharing your story on an efficient and smart way to overcome the crazy interest rates and get value for money. Your math is off sir .check highlighted and reverse please 93222x6 should be 559,332 I don't know where you got 6m
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Rank: Member Joined: 5/4/2015 Posts: 241 Location: Kahno
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93,222 per month for 6 YEARS = 6,711,984
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