{UAH} Mortgages should be the norm if one cannot access reasobale funds within a decade
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11:25 AM |
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Mortgages should be the norm if one cannot access reasobale funds within a decade. It is really painful to make monthly rental payments that contribute nothing to ownership. Imagine paying 6m/= a year for 20 years - then vacating without even a semblance of a right in the property!
The interest rates in Uganda make it really expensive to run a mortgage even when it is priced at a margin lower than other commercial loans.
The good thing about mortgages is that the monthly charge is relatively fixed for long periods of time. Due to fluctuations in inflation, revisions in the rates are commonplace.
In most developed countries strict building standards make it difficult for ordinary folk to build. So the propensity is to opt for already built houses, mostly apartments in form of mortgages.
The important first question has to do with value of the property (quality of construction and space as matched against the cost).
The next question has to do with tenure or tenor. The longer the period, the lower the monthly payments, which makes it seem attractive but increases the cost of the property. A mortgage of <xx>m at 20% interest can tripple in total repayments over 20 years.
Mortgages are a good thing but look at the property properly and examine the fine print before signing up. The first protects you from having to make mortgage repayments while at the same time incurring heavy maintenance costs. The second protects you from an unscrupulous bank revising repayment amounts or rates at every opportunity.
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-- The interest rates in Uganda make it really expensive to run a mortgage even when it is priced at a margin lower than other commercial loans.
The good thing about mortgages is that the monthly charge is relatively fixed for long periods of time. Due to fluctuations in inflation, revisions in the rates are commonplace.
In most developed countries strict building standards make it difficult for ordinary folk to build. So the propensity is to opt for already built houses, mostly apartments in form of mortgages.
The important first question has to do with value of the property (quality of construction and space as matched against the cost).
The next question has to do with tenure or tenor. The longer the period, the lower the monthly payments, which makes it seem attractive but increases the cost of the property. A mortgage of <xx>m at 20% interest can tripple in total repayments over 20 years.
Mortgages are a good thing but look at the property properly and examine the fine print before signing up. The first protects you from having to make mortgage repayments while at the same time incurring heavy maintenance costs. The second protects you from an unscrupulous bank revising repayment amounts or rates at every opportunity.
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"When a man is stung by a bee, he doesn't set off to destroy all beehives"
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