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Do I have to be in Israel to obtain a mortgage?
No. We have many clients that do not reside in Israel or need to begin the mortgage process prior to making Aliya. A power of attorney, and other requisite paperwork, can be signed either at an Israeli consulate or via notary/apostille in your country of residence.
How much financing will the bank provide me?
Israeli citizens are able to obtain up to 75% financing on a purchase property (if it is their sole property) and up to 50% financing on an existing property. Non-Israeli citizens are currently limited to 50% financing.
Are there fixed mortgage rates in Israel?
Yes. Fixed rates are available in both linked to inflation and not linked to inflation products. Prepayment penalties can be a factor when taking a fixed mortgage. While fixed rates are available in Shekels, Dollars and Euros through a select number of Israeli banks, rates can vary greatly on these products from bank to bank.
How much will I qualify for when applying for a mortgage?
Your monthly mortgage is based on your earnings and local Israeli banks will not allow you to take out a mortgage loan in excess of 40% of your net monthly household income. So for example, if your household income is 10,000 shekels, your monthly mortgage payment cannot exceed 4,000 shekels per month.
How long does the mortgage process take?
From the time your documentation is received the process can take between 3 to 6 weeks to actualize your mortgage, depending on the timeline laid out in the purchase contract.
Do I need to get pre-approval before purchasing?
Getting pre-approval from at least one bank is recommended before signing a purchase contract. In Israel this is called an “Ishur Ekroni”. This is a basic credit approval so you can feel confident that the bank will finance your loan based on your financial position. Generally, to obtain pre-approval, it is just a few days from the time all the relevant paperwork has been submitted.
Can I refinance a mortgage taken in Israel?
Yes. Refinancing in Israel entails low fees and no additional taxes. It is important to note however that there may be pre-payment penalties associated with refinancing a mortgage which must be taken into account. In addition, when moving your mortgage over to a different bank there are some associated fees.
Is my mortgage in Israel tax deductible?
Israeli citizens are not entitled to a tax rebate on their mortgage. You may be entitled to a tax rebate in your country of origin if you are still filing a tax return there. Citizens of the United States are entitled to a deduction on their mortgage interest. It is best to consult with a local Israeli CPA who specializes in American tax laws, or a CPA where you file taxes.
When should I refinance my mortgage?
One of the best reasons to refinance is to lower the interest rate on your existing loan. Historically, the rule of thumb is that refinancing is a good idea if you can reduce your interest rate by at least 2%. However, very often even a 1% savings is enough of an incentive to refinance.
Does your mortgage start over when you refinance?
Because refinancing involves taking out a new loan with new terms, you’re essentially starting over from the beginning. Meaning the interest on the loan begins recalibrates and begins again. However, you don’t have to choose a term based on your original loan’s term or the remaining repayment period.
Can I include overseas earnings when applying for a loan as part of my monthly income?
Yes. Even if you are currently living in Israel, as long as you can show proof of earnings (whether via tax returns, accountant’s letter detailing earnings, or other official documentation) we can use foreign income when applying for a loan.
Which lenders does Blue Crown Capital work with?
Blue Crown Capital works with all of the Israeli banks. More importantly, we spend the time making sure to choose the bank that suits your needs for your loan requirements.
Can I pay off my mortgage prior to the due date?
Yes. It is important to note however that, like refinancing, there may be pre-payment penalties associated with paying off your loan in full or a partial component, which must be taken into account.