I approached an investment bank which offered to give me mortgage loan for a house I identified in Kileleshwa.The house is well furnished and is in a secure and serene environment. I had almost presented my pay slip to the bank for the loan but a friend who owns a home in Ngong warned me against going for the idea.
The friend told me of several people who lost their jobs and later failed to clear the loan and ended up losing the money. I listened to him but was not convinced with his explanation. I want to get your opinion on this.
Answer
Mortgage loan is not always the best and neither is the worst option. The brighter side of this arrangement is that you will get a ready-to-occupy house in an area where you won’t get land to build your own house. Normally, ready-made houses are of high standards and their designs are elegant, implying that you will get value for your money.
Another brighter side of mortgage is that while you are paying the loan, you will look for someone to live in the house so that the rent you collect can cater for the mortgage, which means it’s a win-win situation for you.
The worst part of the mortgage is when your income disappears while in the process of paying your loan. The bank will auction your house and you lose all your money and the house.
Another sad part is that you have no control of the design of the house the mortgage company has built. You simply take what is there.
My conclusion is that you should take a mortgage when you have a stable income ,otherwise it’s better to buy land and build your own home.
