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Not only the mortgage: buying an apartment? There are many more expenses that you need to know - voila! Of money

2022-09-08T05:14:12.184Z


From brokerage fees, through the payment of purchase tax to the expenses of renovating the apartment. Many buyers who are interested in the property do not take into account the many expenses associated with the transaction itself


Not only the mortgage: buying an apartment?

There are many other expenses that you need to know

From brokerage fees, through the payment of purchase tax to the expenses of renovating the apartment.

Many buyers who are interested in the property do not take into account the many expenses associated with the transaction itself.

This is the time to get things in order so that you can properly plan the budget

In cooperation with Bank Hapoalim

08/09/2022

Thursday, 08 September 2022, 09:25

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It is very important to also take into account the associated expenses before taking out a mortgage (Photo: ShutterStock)

When people buy an apartment, they see the obvious before their eyes - the price of the property and the amount of the mortgage in the first stage.

But there are many other variables, some of which are hard to predict, that affect the final amount you will have to pay.

What other factors should you pay attention to and how can you conduct yourself more correctly before purchasing the apartment?



Pre-Purchase Stages



"Purchasing an apartment in Israel has become a cultural matter today, people want to fulfill their big dream," says Odalia Cohen, manager of the southern region of real estate at Bank Hapoalim, "since a large number take out a mortgage loan to finance the purchase of the apartment, it is important to do your homework To enter the procedure with as much information and tools as possible.

I strongly recommend that during the meeting with the mortgage consultant at the bank, you reflect all the relevant information to him and not be shy to ask questions.

Our consultants are professionals and have a variety of ways to assist and make this procedure more accessible and clearer."



Cohen emphasizes that even before you take out a mortgage, you should perform a number of tests, such as the amount of equity you have and whether there are properties in the area where you want to live that you can purchase within your budget: not canceled, such as the payment of brokerage fees and tax payments."



There can also be differences between the various ancillary expenses, says Cohen: "Some of the ancillary expenses are relatively marginal and some are more significant. For example, there are expenses in relatively low amounts such as transportation expenses and various fees (for example, a fee for registering a warning note in your favor in Taboo). Besides this There can be expenses in higher amounts such as brokerage fees, the fees of the lawyer who accompanies you in the purchase transaction and the expenses of renovating the purchased property. You must also take into account the payment of the purchase tax that you may have to pay. This is a tax that the buyer of the property must generally pay within 60 days from the date of signing the purchase contract. The purchase tax rate is calculated according to levels that may range from 0% to 10% of the property's price. The tax levels vary between the purchase of a first or replacement apartment for housing improvers and an additional apartment (that is, a second apartment, third, etc.). As a principle, the more the price of the property The higher the purchased, the higher the tax rate will be.



Therefore, it is very important to also take into account the associated expenses before taking out a mortgage, in order to correctly estimate the total cost of purchasing the apartment."

A mortgage is an important element in planning the purchase, since it is usually taken for a rather short period and depends on quite a few factors (Photo: ShutterStock)

The mortgage



The mortgage is an important element in planning the purchase, since it is usually taken for a rather short period and depends on quite a few factors.

What do we know?



There are several one-time expenses at the stage of obtaining the mortgage.



The credit and collateral processing fee for housing loans (the case opening fee) currently stands at 0.25 percent of the loan amount, a minimum of 300 NIS and a maximum of 360 NIS and must be paid before receiving the mortgage funds.

The cost of registering a warning note in Tabu in favor of the bank is approximately NIS 160 (in the case of online registration the cost is slightly lower).

Online registration of a lien at the mortgage registrar in favor of the bank will cost approximately NIS 160.

In addition, when you take out a mortgage to purchase a second-hand apartment, the bank will ask you to perform appraisals for the apartment using a real estate appraiser that you can choose from a list of appraisers you will receive from the bank.

The price of the appraisals is determined, among other things, according to the type of property and/or transaction, whether it is a qualifying loan from state funds, and special characteristics of the property.

The cost of the appraisals will be determined separately by the appraiser.

The exact amount will be clarified with the bank according to the terms of the transaction and the type of property.

Finally, there is also the cost of a notary who will confirm your signature on an irrevocable power of attorney to the bank in cases where the power of attorney is required, and the cost is determined according to the fees stipulated in the notary regulations.



Along with these expenses, you must take into account the expense for life and property insurance payments that you will have to pay to the insurance company throughout the entire loan period.

The mortgage loan can consist of several loan tracks (Photo: ShutterStock)

Until now, most of the expenses were clear, and now we come to the calculation of the monthly payment for the mortgage itself.

The mortgage loan can consist of several loan tracks.

According to the directive of the Bank of Israel, when a customer receives approval in principle for a mortgage, he must be presented with three uniform baskets showing different mixes of the loan routes.

In addition to this, the approval in principle will include an additional mix of loan routes according to the choice and needs of each borrower ("proposed basket"):



uniform basket 1 - 100 percent non-linked fixed interest rate.


Uniform basket 2 - 1/3 non-linked fixed interest, 1/3 prime variable interest and 1/3 linked variable interest, every 5 years based on government bonds.


Uniform basket 3 - 50 percent non-linked fixed interest and 50 percent interest Variable Prime


Basket 4 - the offered basket - is the basket that is customized for customers and their choice.



Why is it so important to point this out?

Because with the exception of the first uniform basket consisting of 100 percent unlinked fixed interest, all other loans include a component of variable interest that can be exposed to changes over time.

During 2022, the interest rate in the economy increased significantly and as a result the rate of interest you will have to pay on variable interest rates increased, which may make your monthly mortgage repayments more expensive.

Remember, the expenses for buying an apartment may be higher than you think (Photo: ShutterStock)

The expenses for buying an apartment may be higher than you think.

Cohen provides a golden tip: "In my opinion, it is very useful for anyone who takes out a mortgage to prepare ahead of time for unexpected expenses that will arise along the way and to plan it in advance."



Failure to repay the loan may result in arrears interest being charged and enforcement procedures.

The above does not constitute an offer to provide credit.

Acceptance of the loan is subject to the approval of the bank, its conditions and any law.



The above is for information and general explanations only and does not constitute advice adapted to the client and his personal needs.

It is recommended to get personal advice based on your needs before making a deal and/or getting a loan.

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Source: walla

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