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How to Handle Fluctuations in Current Mortgage Rates in Kenya

First and foremost fluctuations are not new to mortgage markets. Recently, it is common to hear about the sudden precipitous rise on their rocketing prices. Since mortgage rates are liable to fluctuate, it is very essential to know about the varying trends by knowing few things beforehand.

Morientez Mureithi, a software engineer, took a Ksh 2 million mortgage a year ago to buy a piece of land and construct a house for his family and pay it slowly over in 10 years at a rate of 12%    which means he was paying a monthly installment of Ksh 27 ,550.00. He would have paid kSh 3,306,000 at the end of the 10-year mortgage.

This was affordable as he had planned and would leave him enough cash every month to support his family and educate his younger brother who is in secondary school as well as live a comfortable life.

This was sadly not the case, there are always the miserable twists and turns of fate and as we are later to learn, a problem came up.

The Kenyan currency was not faring well against foreign currencies and to protect the shilling from slipping down further the Government put pressure on the Central bank to put in measures to deal with inflation which included measures that will reduce the liquidity of the market.

This made the banks increase their lending rates to discourage borrowing and the interest rate of Mureithi’s bank went up to a whooping 22% !!

This in essence meant that Mureithi had to pay monthly installments of Ksh 41, 339.38 every month. This is much more than Mureithi could afford for a home per month and this meant that he had to get an extra job of carrying passengers every evening from a Supermarket in Rongai Area in the Outskirts of Nairobi using  his personal car as a taxi cab to try and manage his current status.

What do we learn from this ?

Firstly, accept the harsh fact that mortgage markets are like chameleons.

They change their course without warning and usually follow no chosen trend. In fact, they are frenzied and volatile. Hence, better is to leach out from hinging unto any deviant expectation gained from the marketplace.

Desist from believing in any particular method and accept the surprising elements present in the market. One need always be prepared for the next big change. Doing so, one can save from falling into any unrealistic expectations that are difficult to recover.

Always keep checking on the activities of bank rates.

This not only helps in keeping one aware on making right investments, but also lets one to judge to make right expectations from the market. A stabilized stock market is less likely of showing needless variations. Moreover, it is only when either the market steeply rises or falls, a big variation is expected to peak.

Thus, handling fluctuations in current mortgage rate is not too difficult provided one bears a vigilant mind prepared enough to accept any surprises elements offered by the market. Due to the high competition in this field, lenders offer mortgage at very attractive rates to attract more and more customers.

A broker will help you know when is the right time to apply for the loan and when will you be able to get the best possible rates. In addition, a good broker will help you keep track of the bank rates for these mortgages. This way, you will be able to know how it works and help you get a good deal.

While looking for the best mortgage rate, ensure that you check with a number of lenders and financial institutions before finalizing any deal.

Current mortgage rate varies fro one lender to the other. Hence, if you spend some time looking at the quotes of different lenders, you might even be able to save a few shillings in the form of low interest rates.

Also by watching the market conditions, you will be able to understand when is the right time to go for the mortgage in order to save some money and get the best deal. Thus, you need to remember these essential things when dealing with mortgage rates.