Archives for mortgage rules

israeli mortgage

Your house costs more than you think–Rule #6

Be  prepared for something for  which you are not prepared. Real estate transactions and their financing are not quite so catastrophic as to demand the full force of Murphy’s Law. However, after hundreds of real estate transactions, I can promise you one thing: something always goes wrong. Your house costs will be higher than you calculated Most times these are minor annoyances that cost only a few thousand shekels to fix. Some times these  are actual deal  breakers that force considerable additional unforeseen costs, including extending rental contracts or finding a new property. Here is a brief list  of some additional house costs that were incurred by recent  clients: problems with the property deed problems with building permits low appraisal late additional demands by...
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debt

Real Israeli Mortgage Rule #5–Consolidate Debt Early

I haven’t written a Rules article for a while. As more and more of my clients are asking about debt consolidation, I need to address this. It is possible in many cases to get a debt consolidation loan using your home as collateral. This makes a lot of sense for many reasons: it reduces your monthly payments, the interest on a mortgage is much lower than the interest on corresponding loans and the amount of time over which your loan amortizes can be much longer. However, mortgages are not simple, not without cost, and not quick. We also have to be more cautious than usual with the banks, as your being between a rock and a hard place is a prime opportunity for the bank to...
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israeli mortgage

Do the banks and Super-Sol really differ?

The Marker newspaper recently did a piece about the prices charged by the same chain in different locations. It was fascinating. You can even read it, translated into English, here: Super-Sol charges more in Dimona than in Ramat Gan They wasted no effort on an easy story. They didn’t compare your local Super-Sol Sheli to the mega Super-Sol Deal out in the hangar center or to some local discount chain. No, they were comparing similar stores in the same chain in different locations. The existence of these daughter chains is an example of price discrimination, a tell-tale sign of monopolistic power, where the supplier takes a different price from each customer. It is easy to understand that there are some local conditions that can...
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Changes in bank rules

The current situation is crazy in the banks. All of the banks are rewriting all of their programs. There are a few good new programs available, but they aren’t suited for most people. I need to reiterate what I wrote in a recent post:Real Mortgage Rule #4: What you heard yesterday means nothing today. What we will tell you today could very well mean nothing a few months  weeks from now. Every case is different, and you should always consult your qualified Israeli Mortgage Advisor....
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mortgage programs

The Real Israeli Mortgage Rules #4: things change all the time

Many times people will tell us that they heard their friend was offered such and such a mortgage at such and such a rate. Or the bank approved them for a 90% mortgage at prime-1%, only they don’t have a written approval. Banks talk, and only explain later that what they meant was a best-case scenario, and that only for a small portion of the loan. Don’t believe the hype. [Aside: I was in the mall this week and was tempted into a store with huge 70% off signs. Of course the small print is up to 70%. When I asked to see which products were included in this amazing sale, they could only show me a few mugs that were still no great...
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israeli mortgage

The Real Israeli Mortgage Rules #3: what you think is unimportant

I can’t stress enough that what you think counts for nothing. We hear stuff like this all of the time: We thought that we would get the money paid directly to us The house next door was sold for 2M, so this house must be worth (forget about rumors, you can check the real contract amount of recent transactions here) But according to our contract we need the money last week We thought that the bank would do ——- and instead they did ======= Flowing sewage: you might think that this is disgusting, but it is of no importance. Sewers have saved more lives and enhanced quality of life more than all medicines. Next time yousmell the wonder, take a moment to be thankful...
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mortgage rules

The Real Israeli Mortgage Rules #2: timing

We can usually have a client approved within a few days after we review their full documentation and interview them. Actually executing your mortgage could take anywhere between a few weeks and several months. There are dozens of factors which might hold up your loan. The most common obstacle is a problem with the property rights. We can usually  tell if there will be a problem from our initial review, but not always. There are lots of hidden things that can prop up. For instance, the process of transferring property rights to the final owners can at times take years. During the process, it is nearly impossible to register a new lien. Right now I have a client who can’t refinance because one of...
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banks

Real Israeli Mortgage Rules

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...
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