How much will I qualify for when applying for a mortgage?

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.

Are there fixed rates in Israel?

Fixed rates are available in both Israeli shekels and American dollars through a select number of Israeli banks. Rates can vary greatly on these products from bank to bank.

How much financing will the bank provide me?

First Israel is able to obtain up to 75% financing for clients without mortgage insurance and up to 95% financing for clients with mortgage insurance.

How much does mortgage insurance cost?

Mortgage insurance costs approximately $25 per month for every $100,000 borrowed.

Is my mortgage tax deductible?

For Israeli citizens filing taxes in Israel, mortgage interest is not yet 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.

How long does the mortgage process take?

From the time your documentation is received, the process can take between 2 to 4 weeks to close your mortgage.

Which lenders does First Israel work with?

First Israel works with 11 lenders spanning banks, investment houses and private lenders.

Will taking a mortgage in Israel affect my credit in the United States?

No. Mortgages and other credit extended in Israel are not reported to the U.S. credit bureaus.

Do I have be in Israel to obtain a mortgage?

No. We have arranged with the banks to allow for closings to be conducted at Israeli embassies outside of Israel.

Can I go into an Israeli bank branch in the U.S. to submit paperwork for my mortgage in Israel?

Typically, 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 very smoothly.

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 are pre-payment penalties on certain types of loans that must be considered.