Getting a mortgage anywhere can be difficult, and there are many concerns unique to mortgages in Israel. There are issues that you might not be aware of that could prevent you from getting a mortgage in Israel, and it’s in your best interest to find out about them sooner rather than later.
Understanding How Much You’ll Be Able to Borrow
Israel has some fairly strict rules about who can borrow how much money through their mortgage. There is a 75% maximum financing percentage on mortgages, which means you’re going to have to pull together at least 25% as a down payment. However, things get a bit more complicated than that. This 75% value only applies to current residents of Israel. If you’re not a resident, even if you’re still a citizen, you can only finance up to 50% of the total value.
This is a difference of a quarter of the total property value, something that many potential borrowers wouldn’t be able to overcome. If you’ve already done the math in your head and figured out what your down payment should be based on those numbers, you’ve already gotten way ahead of yourself. The 75% or 50% isn’t based on the eventual purchase price of the property but rather on the value that the bank determines.
The bank employs appraisers who assess the value of properties, and you can borrow up to 75% of that assessed value. If the bank says your new property is worth less than you’re paying for it, you’ll get less financing. If you haven’t planned ahead for this, it could mean you won’t be able to receive your mortgage.
Let a Professional Israeli Mortgage Advisor Guide You
These are just some of the main factors to consider when looking for a mortgage in Israel. There are still many more, and you’ll need an effective mortgage plan to make sure you’re getting the best deal. The bank wants your business, but their in-house advisors won’t give you the best terms. Instead, go with a private mortgage advisor to make your mortgage journey as smooth as possible.
