Did you win the lottery for an apartment at a discount?
This is how you will edit financially/ShutterStock
Congratulations to the lucky winners: after weeks of waiting, the Ministry of Construction and Housing distributed notices in recent days to 6,816 winners and more out of about 105,000 contestants in the sixth lottery of a discounted apartment program.
A total of 72 lotteries were carried out for projects in about 16 localities across the country.
However, alongside the good news of winning a first apartment at a significant discount for thousands of young couples, the winners should remember that now you must prepare correctly financially for the future transaction, so that it does not put you in an unwanted financial difficulty.
"Although in most projects it is a long period until the apartment is chosen and the agreement is signed, the winners should prepare themselves financially already today. Our recommendation is not to wait for the apartment selection stage to look for sources of financing, but to check today what amount is available to the winners, as mentioned even before choosing the apartments ", emphasizes Maor Ohana, CEO of "Drachno", a mortgage consulting network.
So how do you do it?
According to Ohana, the first step is to check what equity capital is available to you.
"Financing within the discounted apartment program can reach up to 90% of the property's cost in apartments up to NIS 1.8 million. Above this amount, the percentage of financing will not exceed 75% of the property's value."
"It is important to remember that today the cost of the loan is very high, mainly due to an environment of rising prime interest rates and an increase in the consumer price index. Therefore, it is worthwhile to take advantage of the waiting period to increase equity and to examine the financial sources with which it can be increased, such as unopened training funds and more," explains Ohana .
"The second step is to examine in advance what the monthly repayment amount you can afford during the repayment years. It is very important not to take advantage of the maximum amount and to take into account the associated costs, such as mortgage insurance, the cost of an appraiser, opening a portfolio, an external mortgage consultant, linking to the construction input index and more. Also, it is important to take into account unexpected expenses, or a significant future increase in expenses, especially for couples who do not yet have children, and are planning to expand the family in the near future."
"After the sources of the equity capital and the ability to repay are known, it is possible to determine the final price of the apartment that you can purchase as part of the lottery. It must be remembered that the price per square meter is not final and the cost of the balcony, storage and parking must be added to it."
Ohana goes on to explain that "it is recommended to do an initial check with an external mortgage consultant, and not through the bank, to examine whether there are limitations in obtaining a mortgage, such as a low credit rating, or other reasons that could make the mortgage more expensive and even cause a refusal. It should be remembered that alongside the banks today there are also Many non-bank entities, from which you can get mortgages for the purpose of the purchase."
Ohana also refers to couples who did not win the lottery, and explains that "this knowledge is important even if you did not win an apartment at a discount this time. It is recommended to come to the next lottery with the aforementioned advance knowledge, regarding the final and maximum cost you can afford and choose the apartment accordingly.
This will allow the winners to compete for the apartments that are at the limit of their financial ability, and not to choose apartments that they will not be able to finance.
It is better to purchase a smaller apartment than planned than to win a large apartment that cannot be financed.
In recent years, we have seen many couples who won apartments, but due to incorrect assessments, they were unable to finance the apartment and had to give up the winnings."
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