Archives for September, 2008

interest rate

ריבית בנק ישראל לחודש אוקטובר 2008

For the next month, the interest rate in Israel will remain unchanged. The official rate is 4.25% and the Prime rate is 5.75. If you have a prime-based loan, this means that your payments won’t change next month. Here is the official statement: הודעה לעיתונות – 22.9.2008 – ריבית בנק ישראל לחודש אוקטובר 2008 If you are thinking about a mortgage, don’t let this fool you. Mortgage rates are soaring, and have gone up 0.5-1%, depending on program and bank in the past few weeks. Prime mortgages are also getting more expensive, with the banks cutting the amount of discount that they are offering compared to the prime. Every case is different, and you should always consult your qualified Israeli Mortgage Expert....
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Bye, Bye EMI????

This came out the day after I predicted that EMI would be limited to 80%: בנק לאומי מגביל מימון ל-70% This actually makes a lot of sense. EMI is very expensive if you take out a 75% loan, and is reasonable for loans of 90%. However, it should only be used for very specific situations, and not for just anyone who has no cash. It looks like Leumi recognized that most of the clients requesting  EMI were those who just didn’t have enough cash instead of those with high salaries buying up.  ...
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israeli mortgage

The first Israeli to fall in the crisis: EMI

You can read about this here from the bizportal site: הקורבן הישראלי הראשון: אי. אם. אי Is EMI in trouble? From the article, it doesn’t appear to be. In fact, they appear to be overly cautious as befits a company in their business, and they retain higher levels of cash then required by regulation and are unaffected by AIG’s American problems. However, home buyers need to be more realistic. I don’t work at EMI and can’t speak for them. But if I were a private mortgage insurer, I would be tightening my underwriting procedures. If I were a bank, I would be more circumspect of clients who need it. People assume that they can take out any mortgage they want and that EMI is...
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international investments

One of the worst ideas I’ve heard

This is one of the worst ideas I’ve heard in years: Overseas homes offer finance solution during credit crunch in short, they suggest that if you have an overseas property, that you can take out your equity on it with a cash-out mortgage, and use this money to purchase investment properties in your home market. This article speaks specifically about Britons who own properties in other European countries. Why do I mention it? Amazingly, I’ve been getting more questions like this. Foreigners who bought properties in Israel have seen them appreciate greatly. Couple this with the mighty shekel effect and all of a sudden a 25% mortgage on your Israeli second-home can alleviate short-term credit problems. There are circumstances where this might be appropriate....
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israeli mortgage

שווה בדיקה: צנעת הפרט זה לא בטאבו

I never cease to be amazed that the experts writing in newspapers don’t understand the subjects they write about. I wonder why these authors don’t consult someone who understands the financing of Israeli real estate. Here’s one about the new Tabu site: שווה בדיקה: צנעת הפרט זה לא בטאבו BTW, the site isn’t new, it’s been around for a few years. The only thing that is new is that they are advertising. Anyway, about my objections. The author of this piece complains that anyone can check your debts for only 10 NIS. The author only reports what some self-proclaimed citizens’ interest group says and the official ministry’s response, and of course his -2 cents at the end. Who needs privacy. All rights reserved its...
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israeli mortgage

No Cash Out

I’ve had a lot of questions lately about people wanting to borrow against the equity in their homes. When I worked on mortgages in the States, we had two main financial instruments for this. One is called HELOC (Home Equity Line Of Credit), the other was a Cash-Out Refinance, where the homeowner refinances his home for an amount greater than his current obligations. Both of these are great for very specific purposes. The HELOC is appropriate for someone renovating or building a house for example. It is like having a credit card that you don’t have to pay off immediately. The Cash-Out is good if you needed extra cash for a specific purpose like helping a child buy a house. Unfortunately, both of these...
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