My Name is Florence.
I work in one of the banks in Kenya as a Branch Manager. I started working in the year 2008 and since then I have managed to save Ksh300, 000 only. I am not extravagant but I believe that the dream of owning a home is fast disappearing; I can’t save enough to buy a house.
Last year, I visited a real estate agent in order to get information about real estate business and the issue of mortgages. Though he explained to me in length, I was not fully convinced. I have come to this forum to get views from independent people and then take a step based on the answers I receive.
Before I forget, my monthly salary is Ksh 210,000 and I always sign a three year old contract which is renewable based on performance. But the management is so good that it automatically renews our contract once they elapse.
I am desperate to own a home because the house I currently occupy demands a monthly rent of Ksh 45,000,which I think is too much for me.
Thank you for writing to us. I will personally give you my views concerning owning a home through a mortgage.
First I would like to thank you for thinking along that line, very few women in the country reason the way you do.
I have a neighbor who used to work with one of the major media houses in Kenya. His job was very stable and he used to earn over Ksh300, 000 per month. In 2009, he took a mortgage from one of the banks in Kenya. The mortgage used to deduct Ksh55, 000 per month from his salary, but his salary was enough to pay a mortgage and even remain with some cash to save.
The worst happened to him in 2014 when his company underwent restructuring. He was among those who lost their jobs. Since he knew that he had enough experience to enable him get another job, he continued paying a mortgage using his savings. Six months down the line, he was broke and unable to pay for the mortgage. Hopes of getting another job were slim since he had knocked several doors without any break through.
In June this year, the bank repossessed its house. My neighbor had paid a total of Ksh 2.5 million and had remained with Ksh 3 million to clear the mortgage.
One thing you should learn from the case above is that you should have a stable job in order to go for a mortgage. The best people to go for this kind of arrangement are government employees whose letters read ‘permanent and pensionable’
What I can also advice you is to consider going for a house which you can fully clear the payment within 3 or 4 years as opposed to the one which can take 15 years. The way I understand banking jobs in Kenya, it’s important for you to tread carefully.
If you are paying monthly rent of Ksh 45, 000, I think you won’t lose anything if you go for a mortgage where deductions will be equivalent to your current salary. Even if the arrangement will be terminated before you completely settle the payment for failing to pay, you won’t regret much since you will be staying in the house which you are paying mortgage for.