Today my husband and I talked to mortgage brokers from two different banks... scarily enough, we're almost at the point where we're ready to move from the renting world to the buying world. (I'm very excited!! Finally I'll get to unleash my home decorating/renovation obsession on a home of my own! I'm thinking Mediterranean style, or maybe Modern Moroccan. Partly because everything I buy seems to be in shades of blue, red, and gold.)
Here are a few things I've learned about the Israeli mortgage process so far:
1. We'll use a LOT of savings. Banks we talked to asked for 25-30% down payment. (This might partly explain why Israel isn't suffering from a mortgage crisis like the US-- I'm pretty sure that a few years back we could have gotten away with 10% or less down payment in the US. In Israel, you can't buy a house unless you can afford it... and you know how to save.)
2. Credit score? What credit score? Whether you are buying or renting an apartment, that magic credit score that is sooo important in the US doesn't exist here. Rather, banks will want to see your salary pay stubs for the past three months and the past 40 transactions in your bank accounts.
3. Aliyah benefits don't really help you buy a house. One thing I've learned over the past few years is that the aliyah benefits (aside from the actual money we get from the government as part of our "sal klita"-- thanks for that one, government!) don't actually help much at our income level. I.e., we could have received a discount on buying a new car... except that new cars in Israel START at about 100,000 shekels and the discount would have only brought it down to about 80,000 shekels. We ended up buying our used Hyudai Getz for much less, without any benefits. Similarly, we would have only received a discount on our fridge had we bought an Israeli-made product, and although we're Zionists, we like saving money and getting a good product more. So for buying a house, our Aliyah benefits could lock in about a 4.5% interest rate... which would be great if the current interest rate here wasn't about 2%.
4. Mortgage ladies talk really really quickly. And they show a fair amount of cleavage. And they write all kinds of figures on paper and use words like "laybor," which has something do to with the exchange rate to dollars. These are things I noticed as my husband actually followed the conversation, and I smiled and nodded. (He filled me in later!) Btw: our mortagage lady at the second bank was wearing platform shoes, tight capri jeans, blue eye shadow, and a tight yellow t-shirt showing the aforementioned cleavage. And she seemed extremely professional and competent. Try to picture that on a high-ranking bank employee in the US...
5. We will have a lot of options in terms of how we pay. A really confusing number of options. Not just in terms of prime vs. fixed interext rates but in terms of whether we pay in dollars or shekels, whether the amount of the loan is fixed in dollars or shekels, etc. A lot of business here is done in dollars, or at least was back when the dollar seemed more stable than the shekel, so all Israelis have these kinds of choices.
6. We can afford an apartment! We'll be able to afford a better place if we wait till this winter, as we originally planned, but we have enough saved to start looking now! (I also feel quite rich, as the mortgage lady looked at my (pitiful by American standards) dollar salary from my Internet teaching job and said, "Wow, that's a lot.") http://www.yad2.co.il/Nadlan/sales.php here I come!!
Any wisdom to share? This is our first time buying property in any country, although I feel I've watched enough property-buying shows on TV to be an expert. ;)