New mortgage

What is a mortgage?

A mortgage is a loan given by a bank or by a specialized branch in a commercial bank or through an insurance company so that the borrower can purchase a property.

If the borrower fails to repay the loan as stipulated in the agreement, the bank may seize the pledged property and sell it in order to recover its money. This money is covered by the balance of the debt and the balance of retained earnings, if any, is transferred to the borrower.

A mortgage is probably the biggest loan you’ll ever take in your life!

The process of obtaining the mortgage – Approval in principle or pre-approval

The approval in principle is intended to approve the loan application of the borrower for a limited period, usually for 3 months. You must first contact the bank and submit a request for approval in principle for the property in question.

It is strongly recommended to obtain this agreement before signing a purchase contract! Nobody promises you that you will receive the full amount of the mortgage you are asking for, but if you sign a purchase agreement and, in the end, you do not get the agreement from the bank, you may have to pay a considerable amount for breach of contract.

This approval does not oblige the bank to accept the loan, but during the initial examination, you passed the test.

The Bank examines three main parameters:

• • Your financial situation.
  • Purpose of the loan – housing / investment / loan for commercial purposes,etc.
  • Asset – the bank will check the quality of the property, its value, location, etc

Documents required by the Bank to obtain the agreement/approval in principle

• • ID cards.
  • Last 3 months bank statements.

• • Employees – last 3 months of salary slips/ self-employed workers – previous year tax assessment and accountant’s approval for the current year / Company owners – financial report of the corporation/company.

• An estimate of the amount and percentage of financing of the value of the asset.

• • For those eligible for housing assistance – provide proof.

After signing the purchase contract for the apartment, the Bank will request additional documents:

• • • Purchase contract of the apartment.
  • An updated land register document of the property or a recent approval from the Israeli Land Authority.

• • Evidence of additional sources of income such as: rent, alimony, social security, etc.

After the final approval, setting the repayment plan and the interest rates, the bank will ask you to carry out appraisals made by one of the appraisers who works with the bank.

Why take an independent mortgage consultant?

A private mortgage advisor is the customer’s agent and not of the bank! His remuneration comes solely from the client and not from the bank. Therefore, the advice is objective and has no hidden interests.

An objective mortgage advisor has three main roles:

• • • The primary and most important role of a mortgage advisor is to “clarify the needs of the customer” – analyzing the customer’s current and future financial needs.
      The counselor will need to check their age, marital status, number and age of children, current client income, future earnings, workplace stability, calculation of fixed and variable expenses, financing percentages, the monthly profitability ratio, etc.
  • • To build an optimal and economically correct diversified mortgage portfolio for the client based on the customer’s current and future financial needs.
  • To get the lowest interest rates for the chosen mortgage portfolio.

A professional and objective consultant builds a diversified portfolio based on the client’s changing needs which is saving time and money when negotiating with the banks. In case of difficulties, you will be able to freeze the mortgage (dismissal / unexpected expenses) and/or repay the mortgage earlier.

The bank, which is not a non-profit institution, has, of course, a priority to give the client a long-term mortgage, with a higher interest margin and more profitable options from the bank’s point of view. This is where the mortgage advisor comes in, who is responsible for providing the most appropriate mortgage (according to client’s needs) and the most cost-effective aspect for the client.

If you have any questions, contact us now for mortgage advices and details about your options.

Itay Mardix – Financial and Mortgage Advisor.
Phone number – 052-6007476
Office – 074-7419441

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