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Mortgage Loans
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Abby
#1 Posted : Wednesday, December 14, 2011 1:11:47 PM
Rank: Member

Joined: 3/7/2011
Posts: 112
Hi Gentelemen,

Over the weekend, I met officials of Housing Finance in Kitengela where they have opened a shop.

They showed me their mortage rates, current ones. A shocker: you borrow 5M at 97k monthly for 20 years, yet that house can only fetch 20k monthly rent.

Is mortage loan under these conditions of any use really! We are in tough times.

Regards
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Cde Monomotapa
#2 Posted : Wednesday, December 14, 2011 1:16:20 PM
Rank: Chief

Joined: 1/13/2011
Posts: 5,964
smile Sad
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bird_man
#3 Posted : Wednesday, December 14, 2011 1:19:31 PM
Rank: Veteran

Joined: 11/2/2006
Posts: 1,206
Location: Nairobi
Please confirm..
97k*12months*20yrs=23M.
Formally employed people often live their employers' dream & forget about their own.
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Gathige
#4 Posted : Wednesday, December 14, 2011 1:23:33 PM
Rank: Elder

Joined: 3/29/2011
Posts: 2,242
@ Abby,

Unless the agent wanted to rob you, it is incomprehensible how one can pay 97k/month for 20 yrs on a 5 M loan. It seems not to add up.
"Things that matter most must never be at the mercy of things that matter least." Goethe
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Abby
#5 Posted : Wednesday, December 14, 2011 1:30:46 PM
Rank: Member

Joined: 3/7/2011
Posts: 112
I was given a document which I have in my house; very true - it comes to 23M.

Visit them. We are talking about 24% p.a interest.

For your information, at 24% on 5M, the first month interest should be: 100,000/= (interest only). So, it is true.
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the deal
#6 Posted : Wednesday, December 14, 2011 1:58:24 PM
Rank: Elder

Joined: 9/25/2009
Posts: 4,534
Location: Windhoek/Nairobbery
Old clients pay 16.2% new ones pay 23%...3 month T-Bill is at 20% what do you expect? When dividend yields are higher than rental yields..what do you still want and go do in real estate..come to the stock market.....smile
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jamplu
#7 Posted : Wednesday, December 14, 2011 2:15:24 PM
Rank: Veteran

Joined: 3/25/2010
Posts: 939
Location: Nai
things are thick and you haven't yet seen the kind of house you will get @ 5M you will keep asking where your money went. L
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bwenyenye
#8 Posted : Wednesday, December 14, 2011 2:36:13 PM
Rank: Elder

Joined: 5/24/2007
Posts: 1,805
Its not gonna work guys. The mortgage rates have to come down to about 15% or else the banks will collapse due to defaults. You cannot peg a long term debt to a short term T bill rate. Surely, you cannot compare 3 months with 15 years.... Something got to give.

Watch the publications of banks from Dec to June next year and you will realise why the big guns are selling banks off
I Think Therefore I Am
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bwenyenye
#9 Posted : Wednesday, December 14, 2011 2:42:37 PM
Rank: Elder

Joined: 5/24/2007
Posts: 1,805
Well, then after I have financed a 20 flat building in Eastlands with a loan whose rate has tripled, some idiot decides that any tenant paying less than 25K should be under the rent tribunal i.e I cannot increase rents without begging someone who has no idea how i built the property.... I foresee chaos in the industry and a hike of rents to above 25K if only to keep off the rent tribunal fellows. ( anyone saw how they were duped by Marshalls against the Chinese?)
I Think Therefore I Am
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Gordon Gekko
#10 Posted : Wednesday, December 14, 2011 4:03:07 PM
Rank: Elder

Joined: 5/27/2008
Posts: 3,760
bwenyenye wrote:
Its not gonna work guys. The mortgage rates have to come down to about 15% or else the banks will collapse due to defaults. You cannot peg a long term debt to a short term T bill rate. Surely, you cannot compare 3 months with 15 years.... Something got to give.

Watch the publications of banks from Dec to June next year and you will realise why the big guns are selling banks off


By my knowledge (maybe limited) HF, the biggest lender has 16,000 mortgages. Let us assume all the other lenders hold a combined total of 50,000. Even if all 66,000 mortgages defaulted, is that enough to bring the banking sector down?
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