How not to own a house in Kenya

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Let’s do a case study on a mortgage for a 10M house with @NCBABankKenya Bank whose interest is 13.3 P.a.
What you should know is that the bank requires you to raise a 10% deposit which is 1,000,000
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then BANK CHARGES are as follows:

  1. Application fee 225,000.
  2. Monthly service fee 84,000.
    THIRD PARTY CHARGES are as follows:
  • Stamp duty. 400,000.
  • Legal fees. 133,750 (minimum).
  • Valuation fees. 100,000.
  • Excise duty. 30,000.
  • Annual life insur. 212,152.
    -Fire Insurance 157,500.

The bank therefore funds the remaining 90% which is 9,000,000 payable in 20yrs which sounds like a good deal…BUT, hold your horses!
The interest payable to NCBA is around 17,079,292.
In other words,by the time you repay the loan you will have spent 27,422,595 for the 10M house! Pray that fortunes never change in between forcing you to default on the monthly installments because the bank may become a nightmare

For the next 20 years you keep paying for that house, you also keep praying that the title deed is legitimate because a government minister or a parastatal chief can one day wake up drunk and say that the house is built on a grabbed government land.

Please remember 10M is for a simple 2 bedroom flat hanging in the air.

The nightmare that is this country is so great that the devil takes notes of the horrors done on citizens by the banking system!
As a man, you keep praying your wife doesn’t seek for a divorce and you end up losing the house and then you’re slapped with
alimony which includes paying for the mortgage on a house you no longer live in.

Ask yourself, what will be the value of that house after 20 years? Depending on the shilling strength, it will be less than 10m! This is because you have to factor in inflation and or worse…hyperinflation.

To those who keep saying your house is an asset, if it’s mortgage, the only thing I can tell you is KEEP OFF MORTGAGES !

Wueeh, nightmare is real

A family house is not an investment. It’s a ‘necessary’ liability.

A 10 million house? Lets be realistic. Hizi hesabu si za elders. Piga hesabu I (we) can understand, maximum 2.5 million.

I have never understood kununua nyumba na loan/mortgage. And the house itself doesn’t generate rental income. Any leverage should be for money making projects peke yake.