Please review this series of posts about the rules that you should follow for taking out and executing a mortgage in Israel. I emphasize loan execution. It is not always easy to get approved for the right loan at the right bank, but with a little bit of work we usually get what we want. However, execution is a totally different story, it is out of our hands, and there are lots of little things that you can do to mess up your own loan.
You can find lots of lists of rules and regulations about mortgages in Israel. You should ignore most of that stuff. Though much of it might be technically correct, it will set you on the wrong track. Work with us, using our method, and you will get the best results and minimize your long-term debt.
If you’re reading this via an email subscription, come see the new look and feel of the Understanding Mortgages in Israel Blog in honor of this series of posts. Here we go!
Real Israeli Mortgage Rule #1–Don’t go into your bank branch
The most common error that we get from new clients is that they have already gone into the branch where their personal account is managed and speak with the mortgage clerk there.
It seems almost natural that we should go to the people we “trust” with our money, right? Wrong! Banks know all about client stickiness, this why they make attractive offers to students and soldiers. Most people open up an account and won’t leave their bank for tens of years, if ever. When is the last time you switched banks? When the bank knows that it has you in its pocket, it makes much less of an effort to give you the most competitive offer.
Your bank also likely makes you very attractive sounding offers to make you come in and ask. Last year a bank offered clients 0% mortgages for five years if they move their banking. Another bank offers you a subsidized mortgage. Yet another recently advertised 1% mortgages. All of these are nothing more than efforts to pull the wool over your unsuspecting eyes. They’ll give you 60,000 NIS @0% for five years, but they’ll also take a much higher rate on the remaining 582,000 loan that you’ll be taking.
From our standpoint as professional mortgage advisers it also makes life much harder for us representing your interests. Once you’ve been to a bank, there is a good chance that you have been locked into it and that we can’t take you to a different branch of the same bank should the circumstances demand it. Banks work the same way as many other businesses, and there is no uniformity of programs or prices throughout the different branches of the same bank. Your personal account may be managed in branch #123 of the Second National Bank, but we may be able to get you a better loan at branch #126. Leave us this flexibility.
Rule #1: Don’t just go into your branch or call up the banks mortgage hot line. You could be locking yourself out of the best deals.
Corollary to rule #1: set up a mortgage consultation with us before you start on your mortgage process.
If you’ve already done this, don’t despair. There is still a lot that we can do for you, but you will get the best results by speaking to us.
Please review the additional posts about The Real Rules of Israeli Mortgages