Following are the most common questions we receive from our clients. Some relate to mortgages, while others request clarification as to the services we provide. In addition to the responses below, you can find important information in the “Articles” page, as well as in the various clips and information throughout the site. Potential clients or people interested in our services are welcome to send in additional questions through the contact form, or directly to our email address, and we will respond and perhaps publish them for the benefit of our other viewers.
How much personal capital do I need in order to purchase an apartment?
The banks offer the best mortgage terms to clients who pay a deposit of least 40%. Nevertheless, banks do approve loans with higher LTV ratios that are tailored to each borrower based on his particular situation, down to a minimum deposit of only 25%. When mortgaging an additional property, one can even receive full financing, requiring no deposit at all or only a 5-10% deposit.
We met with the banker, and he seemed pleasant and reliable. Why shouldn’t we handle the mortgage process on our own and spare the consultation costs?
As explained in our “Mortgage Costs” article, the banker may indeed be pleasant and professional. However, you must remember that he does have profitability goals and that inevitably, your own interests of saving money conflict with the interests of the bank, which the banker is representing – and that is to maximize profitability. A mortgage consultant, on the other hand, is a person who has professional expertise similar to the banker’s, but who is acting solely to promote your goals – saving on the mortgage costs and adapting it to your personal needs.
How much can we save already on the mortgage? After all, it isn’t a loan with interest rates such as a regular commercial bank loan!
Indeed, the interest rates on mortgage loans are lower than those of other types of loans provided by the banks. However, due to the high loan amount and the extent of time over which the loan is to be repaid, choosing the wrong plan and failing to haggle over the interest rates will lead to unneeded expenses that are, on average, tens of thousands of shekels higher!
Can you explain to me in short how this saves tens of thousands of shekels? Will I not receive the same results as you by obtaining a number of offers from different banks?
This is an excellent question. Indeed, the more effort you invest into comparing between the banks, the more money you will end up saving on your interest rates. However, as we wrote in the “Mortgage Costs” article, the mortgage bankers are smart, pleasant, and convincing. But more importantly – they are not on your side. They need, based on the goals set to them, to sell the plans that are most profitable for the bank. They may lead you to consider directions that you had not considered before (and, coming from them, will sound relevant even while they may not, in fact, really be), and these will serve as your anchor points when comparing interest rates. And so, while the diligent consumer is (rightfully!) happy that he had succeeded in lowering the interest rates from the first offer provided by the bank, he does not have the tools to know what margins the bank really had for each plan, and whether these were the best plans and most appropriate structure for his needs.
Furthermore, even the best interest rate obtained through such “market-making” will generally still be higher than those a consultant will receive, due to his insider’s knowledge of the bank’s reduction capabilities and his client mass. This difference is worth tens of thousands in small loans, and hundreds of thousands in larger loans.