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.
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.
No. Israeli bank branches in the U.S. are often separate corporations from the ones in Israel and generally do not correspond with each other.
No. 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.
No. Mortgages and other credit extended in Israel are not reported to the U.S. credit bureaus.
First Israel works with all of the banks in Israel as well as a number of private lenders and insurance companies.
From the time the your documentation is received the process can take between 3 to 6 weeks to fund your mortgage.
For Israeli citizens filing taxes in Israel, mortgage interest is not currently tax deductible. However, United States citizens may deduct mortgage interest paid on their home in Israel from their U.S tax returns, provided they itemize the deductions on Schedule A.
Mortgage insurance is not currently available in Israel.
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.
Most Israeli banks usually use traditional underwriting criteria when qualifying debt to income ratios: a 33% monthly mortgage payment to net income ratio. However, there are other factors that can effect the banks’ decision. Qualifying rates, typically 2-3% above the adjustable rate, are used when qualifying your payment on adjustable loans, impacting the amount for which you may qualify. If you have significant liquid assets but lack income, the loan may still be approved. Credit and debt need to be analyzed as well. These are some of the reasons why we often advise our clients to apply for an “ishur ikroni” or pre-approval before signing a contract to purchase property in Israel.