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A mortgage is a loan that you get from the bank, in exchange for a mortgage on your future property. This loan is usually taken for a long period, which can reach up to 30 years.
Mortgage tracks in different shapes and caps. The main difference between them is how the interest rate is calculated: there are fixed or variable rate mortgages. Variable-rate mortgages differ according to the factor that affects the change in interest rates (consumer price index or foreign exchange value)
Mortgage Fund -
The same initial amount that you borrow from the bank, which is the part you need to buy the apartment. According to this fund, the interest rate on the mortgage is calculated..
Approval in principle for a mortgage -
This is an approval received from the bank and is only an approval in principle for granting the loan. Its limitation is that it is valid for a period of 3 months. During the approval period in principle, the parameters examined are: your financial situation, the purpose of the loan and the quality of the property that you will purchase. The approval is given at no cost and it does not require you to take the loan nor does the bank approve your final mortgage. It is important to get approval in principle even before signing a sales circular.
Mortgage mix -
Probably the most important part of a mortgage. This is a collection of several mortgage routes that have different characteristics and interest rates, and from which your personal mortgage is built.
The mortgage mix consists of a desired monthly repayment, routes that you would like to combine (with certain restrictions by the Bank of Israel), the interest rate in each route, the risk that exists in the mix, the time of mortgage repayment, the possibility of early repayment of the mortgage and an early repayment fee. The job of a mortgage advisor is to tailor a good mortgage mix for you, with a principal and interest rate that you will be able to meet.
Mortgage Financing Percentage -
Financing percentage - The financing percentage is basically the amount of mortgage you take from the bank in relation to the actual price of the apartment. Let's say you want to buy an apartment for NIS 1 million, and you take out a NIS 600,000 mortgage from the bank - the bank's percentage of financing is 60%. Note: The percentage of interest that the bank gives is affected by the percentage of financing Of the bank increased).
Mortgage Insurance -
Mortgage insurance is basically a tool that aims to assure the bank that it will get back its loan.
This insurance is divided into 2, life insurance and building insurance.
The purpose of life insurance is that the borrower does not "drop" on his family members the mortgage burden in case something happens to him (tap tap). In such a situation, the insurance company will pay off the balance of the loan debt. The insurance payment varies from person to person depending on his age, health and earnings, the length of his mortgage period and the amount of monthly repayments.
Building insurance insures the property in the event of a flood, fire or earthquake. Its purpose is not only to protect you but also to preserve the property, which is currently pledged to the bank, and that in case of need the bank will have no problem selling. Building insurance is usually limited to the amount of the mortgage (say, if you took out a NIS 1 million mortgage and the house costs two million, the insurance will cover until you reach NIS 1 million).
Go to our Insurance page
How to choose a mortgage adviser?
You are sure that you understand large parts of the dictionary of mortgage concepts, but how to apply the rules and comply with the banks is not simple - just for that we have compiled an objective mortgage adviser experienced in dealing with banks and know how to speak "mortgage language" fluently.
Go to our Mortgage Adviser page.
