Archives for August, 2009

bank of israel

Warning: watch out for the Prime interest rate

Rates on most mortgages have already gone up. Now the official Bank of Israel rate, and with it the Prime rate, will also rise next week. See the official announcement here. For most people, it has already been disadvantageous to refinance for some time. If you are looking to save on the cheap, forget about it. Under certain circumstances it is still advantageous to refinance, but not if you are looking to reduce your monthly payment. This increase does signify that we might be entering an interest rate whirlwind . On this page, please take a look at the numbers, to see what might happen to you if you took somebody else’s advice over the past few months. [The Prime rate is 1.5% more...
Continue Reading »
interest rate

Wall Street Journal: Israeli interest rate to rise

The mother of all business papers just came out with this article:Article – WSJ.comThey think that there is a very good chance that we might see the interest rate raised already next week. The rate on most mortgages has already gone up. The rationale of course is that we are already on our way out of the recession and that our inflation is already getting ugly. See my previous posting here. Hopefully, this will give us a needed break from the refinancing blues. During recessions people refinance. For most people, refinancing right now will probably be a losing proposition, costing them more than they will save. People buy houses in expanding economies, and we like those much more. Every case is different, and you...
Continue Reading »

Inflation is up and the dollar is down

See July’s inflation here: Bizportal – האינפלציה זינקה ביולי: המדד עלה ב-1.1%, לוחץ על פישר בעניין הריבית There is no great surprise here. As the increase in VAT settled in, prices went up accordingly. Currently our inflation is at 3.2% annual, including all of the negative numbers at the beginning of the year. While loans are not as attractive right now as they were a little while ago, we still have strategies to combat the inflation monster which threatens the average mortgage taker far more than most understand. Strategies are individual and will vary for each client. Every case is different, and you should always consult your qualified Israeli Mortgage Expert....
Continue Reading »

Nothing stays the same

One of the more common mistakes we see clients make is the assumption that things are static. Nothing could be farther from the truth. I often hear something along the lines of this guy who works with me got such and such program, why can’t you get me better. Let’s leave aside the initial presumption that just because a particular mortgage was right for one that it would be right for the second, in very few cases is this true. The important thing to understand is that bank has programs that change daily. Supply and demand determines everything in the lending business. The banks are required to hold securities to back the loans that they make. When their cost of capital changes, the rates...
Continue Reading »