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amother




OP
 

Post  Mon, Jun 29 2020, 7:07 pm
How do mortgages work in israel?

If we sold our home here for about $200,000 then would that be a downpayment enough to get approximately what amount of a purchase price for a home?

Thanks for your help we are just beginning our search for a home to purchase in Israel Smile and need an approximate starting point of an idea of how much we could pay/afford for a home.

How do mortgages work there?

We would be Israeli citizens by then Smile
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amother




Peach
 

Post  Mon, Jun 29 2020, 9:12 pm
When you first move to Israel, it's best to rent, because you want to be sure you are in the right neighborhood.

You might want to use a mortgage broker if you aren't familiar with the system in Israel. Banks here expect as much as 40 percent of the purchase price as a down payment. You'll also have to take out life insurance that pays off the mortgage in case the homeowner dies. It's a lot, but bear in mind that Israel didn't see its housing market collapse in 2008 because of unsound lending.
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amother




OP
 

Post  Mon, Jun 29 2020, 9:31 pm
Thanks! So helpful!

I understand about the advantages of renting first but it could also be a good investment if we were in a position family wise to sell and move if necessary.
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amother




cornflower
 

Post  Tue, Jun 30 2020, 12:00 am
Sometimes the banks will give a 70% mortgage but then you'll have very high monthly repayment. More usually you'll be offered a 60% mortgage. So if you have 200000 dollars you are probably looking at place between 1.6 - 1.7 million. You need to leave money for an agent, usually 2% of the purchase price. You can try and negotiate the price before you use them. A lawyer usually charges 0.5%-1%. And it's probably best to use a mortgage broker to get the best deal.
Happy to recommend English speaking broker (although usually best to use a broker in the area you are looking at). mortgage broker and lawyer if you need.
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amother




Aubergine
 

Post  Tue, Jun 30 2020, 12:20 am
Instead of a mortgage broker use the organization called tzavta. They charge approximately 2000nis no matter the mortgage amount. We bought a 4.3 million nis property and only paid 2000nis mortgage broker fee.
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EBY




 
 
 
 

Post  Tue, Jun 30 2020, 5:50 am
Keep in mind that you also need to prove you have steady income in order to get a mortgage! I'm not sure how you can prove that if you just got here so you don't have Israeli paychecks. Anyway it's worth asking if you could get approved based on your American salary... assuming you are continuing to receive the same one after Aliya.
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amother




Peach
 

Post  Tue, Jun 30 2020, 6:19 am
EBY wrote:
Keep in mind that you also need to prove you have steady income in order to get a mortgage! I'm not sure how you can prove that if you just got here so you don't have Israeli paychecks. Anyway it's worth asking if you could get approved based on your American salary... assuming you are continuing to receive the same one after Aliya.


It can be enough to show bank statements.
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Teomima




 
 
 
 

Post  Tue, Jun 30 2020, 7:15 am
Just to confirm when you say sell your home for $200,000, keep in mind if you have a mortgage then you're not walking away with $200,000 in hand. I assume though you've taken that into consideration.

When we bought we did it through the bank but at the time it was the best deal we could get. These days I hear brokers are the best way to go about it.

I also recommend you don't jump right in to buying. There's a big learning curve to Israeli homes, and the right community can make or break your Aliyah experience. And buying a home here is insanely stressful, it's not something to do willy nilly, with the attitude that you'll just sell and move. Better to rent and buy right.

As for mortgages, do a search online. There's tons of info available that detail, in English, the home buying process in Israel.
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amother




OP
 

Post  Tue, Jun 30 2020, 7:17 am
Thanks everyone -- appreciate it!
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amother




Puce
 

Post  Tue, Jun 30 2020, 7:17 am
amother [ cornflower ] wrote:
You need to leave money for an agent, usually 2% of the purchase price. You can try and negotiate the price before you use them.


This really depends where you are looking. In some areas, agents have monopolized the market - in others, you can easily find a property without one.

I really dislike agents and always try to rent/buy without one. In my experience (30 yrs here in Israel), agents add very little value, UNLESS you are literally off the boat and can't do anything on your own. Bottom line is that they are looking to make a sale, and that's where their interest lies.

I have seen the same properties listed on yad2 with an agent and without. Obviously I bought without. I also have always sold my homes without.

You will need a lawyer anyway to address any possible legal issues (are there any illegal additions? What are the zoning laws for that area? Is there a chance that a building can be constructed across the street?) - and to write up the contract. The agent does NOTHING except 'show' you the house and tell you what you want to hear about the neighbourhood.

If you can get access to a house without an agent, do it.

(One caveat - some agents will pressure the owner to lower the price so they can make a deal. In that case, an agent may be worth it. But owners in Israel usually only lower the price when they are ready to, regardless of agents)
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ora_43




 
 
 
 

Post  Tue, Jun 30 2020, 7:28 am
What kind of mortgage payments do you want/can you handle?

If monthly payments aren't an issue, and if your income is good, you could probably do up to around 1.8 million shekels.

(assuming here that $200,000 = a bit under 700,000 shekels, and that you need to spend 50,000 on various expenses - mortgage broker, lawyer, movers, etc)
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