The mortgage process is a significant and complex procedure.

The process combines:

• strict regulations
• currency considerations
• conservative banking

For example:

• LTV (loan to value) limitations
• Currency and exchange rate risks
• CPI (consumer price index) LINKED LOANS
• Conservative PTI (payment to income
• Legal and Bureaucratic complexity

The personal relationship and professional guidance are crucial to simplify the process—especially when taking a mortgage involves such a bureaucratic complexity.

Our goal as bankers is to assist by creating a smooth, simple, and pleasant experience for our customers.

Bank of Jerusalem uses methods to make the process we mentioned above, easier, e.g. by POA or family members.

1. The process begins with an initial interview between the banker and the client – KYC- know your costumer.
2. An assessment of the borrowers is required in order to customize the loan to the borrower.
3. Underwriting check – assessment of the borrower's income and debt-servicing ability. It is important to note that the Bank has the ability to analyze tax and income reports for different types of customers, including the ability to analyze income from companies owned by the customers.
4. Client profiling – it is important for us to understand the type of client from the beginning of the process. For instance:

A customer may receive financing up to 75%, while the level of financing differentiates in relation to customers with other tax residency.

A costumer who owns several properties or whose income derives mainly from real estate - may qualify for a business loan up to 75% - sometimes even up to 80%.

There are different types of mortgages that we offer at the Bank, for example:

Housing loan – usually for the purchase of a first-hand or second-hand residential property, or for the construction of a residential home, or renovations.

The maximum financing rate typically ranges between 50% to 75% of the property value.

A loan for general purposes – a loan intended for various needs, such as consolidating existing consumer loans or providing financial assistance to a family member etc.

The maximum financing rate is generally up 50% of the property value.

Business Loan secured by a residential property – Intended for example, for clients who own multiple properties or whose primary income is derived from real estate rent.

In such cases, customers can receive financing up to 80% of the property value.

It is essential to understand the various mortgage options provided by the Bank.

For example:

• A 30-year mortgage with equal monthly payments of principal and interest. (Spitzer)
• A mortgage with no monthly payments (balloon) or interest-only monthly payments (grace) during the initial years.
• Short term loans for up to three years, repaid once funds become available—such as selling the purchased property or another financial source.
• Business mortgages—secured by a residential property—for clients whose income derives primarily from real estate. In some cases, we can finance up to 80% of the property value.

Furthermore, it is important to understand the different interest options for example:

• Fixed rates – advantages of a steady monthly payment.
• Variable rate – based on Prime (based on the interest rate set by the Bank of Israel), Makam Yield (based on Israeli bonds)

We offer loans that are linked to CPI (consumer price index) – can assist on reducing monthly repayments.

The maximum mortgage loan period is 30 years – according to Israeli regulations.

• Income statements from recent years
• Pay slips / foreign tax returns
• Bank account statements
• Accountant income confirmations
• Documents regarding savings, investments, or assets
• Credit reports
• A document demonstrating the clients’ financial wealth, if required
• IDs
• Contract of purchasing the apartment.
• Real estate appraisal

Additional documents may be required depending on the circumstances of each loan application and according to applicable regulations

A new immigrant faces several unique challenges when taking out a mortgage in Israel.

• Foreign or new established income in Israel.

Foreign income may not be fully recognized.

Income in Israel not yet stabilized.

• Timing with financial Integration

High initial expenses (rent, furniture)

• Pressure to buy property quickly.

However, there are benefits as a new immigrant, for instance, a lower purchase tax rate is imposed in comparison to the rate imposed on Israelis.

The mortgage process for a new immigrant can be made easier by:

• Professional guidance - to see if they are entitled to tax benefits or other financial benefits
• early planning before approaching the Bank
• A clear understanding of the mortgage tracks
• Prepare documents in advance

The Bank would be happy to support you from your very first step—both in the mortgage journey and in your first steps in Israel.

Loan approval is subject to the sole discretion of the Bank. Failure to meet loan repayment obligations may result in penalty interest and legal enforcement procedures. The above information is general and does not replace personal and professional advice. Information may change according to regulatory updates and bank policies. The Bank does not provide advice in relation to tax aspects whatsoever. It is recommended that you seek professional advice on tax matters.