Importance of Buying Property on a Mortgage Loan
One should consider the terms of the mortgage to ensure it aligns with their planned long-term goals and financial situations.
Cece Ndululu Usyu
Owning a house is a dream to most individuals but the dream is mostly cut short because of the cost involved in the process of buying land and building a house hence making them opt for retirement plans. Over the years this norm has been changing, thanks to the mortgage loan that has helped the common Mwananchi to purchase or build a dream home even at an early age despite their earnings.
A mortgage loan is a type of loan that is offered by banks and other financial institutions such as the Kenya Mortgage Refinance Company (KMRC) to home buyers under specified terms. Mortgage loan is mostly preferred because of the benefits it has to the lender. Some of the benefits include;
- Affordability. Buying a home with a mortgage loan is quite affordable because of the duration that is set to pay the loan at a low-interest rate. This enables the lender to make long-term plans of amortization.
- Appreciation. Another benefit of a mortgage is the potential increase of property's value over time offering financial gain to an individual when selling the property.
- Stable Housing Cost. With the increase of potential rent fluctuations, fixed-rate mortgages have made homeowners have constant monthly payments hence providing stability in budgeting and consistent payments.
- Homeownership. Mortgage loans have made homeownership more accessible because individuals can purchase a home without having to pay the full purchase price upfront.
- Leverage. Most mortgage financing institutions allow individuals to leverage their funds, using a small amount of money worth 20% as a down payment to control their assets.
Even though there are benefits associated with a mortgage loan, one should consider the terms of the mortgage to ensure it aligns with their planned long-term goals and financial situations.
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