Tens of thousands of households face a situation where the banks refuse to give them a mortgage. They are among those to whom the bank declines financing to purchase a property and often many of them feel helpless when confronting large organizations. Contacting a skilled professional in the field can help them avoid this situation in the first place, or alternatively can find them a solution.
Mortgage consultant Barak Sasson, owner of Haderech Hanechona ("The Right Way"), accompanies many clients caught in a situation where they do not receive financing from a bank. He analyzes their financial situation and guides them until they fulfill their dream of buying a house.
"The process begins when I examine the client’s data, and see what repayments they can make. As soon as I am convinced that they are able to fulfill the terms of the transaction, I can convince the bank and the client will be able to buy an apartment", says Barak Sasson. He explains that a mortgage is, in fact, a lien on a property and a loan spread over a long period, and it is one of the most significant financial commitments that a person takes on in their life.
More than 15 years of reliability and experience
Barak Sasson is an experienced mortgage consultant who has been active in the field for more than 15 years. Based on his experience he is convinced that almost anyone can receive finance from the bank, even if they have a problematical financial history. "Many people have undergone a difficult period financially and the bank remembers it", says Barak Sasson, "but I am able to prove to the bank that the client is able to pay the monthly repayments and that it is possible to give them a loan, because as soon as I believe in the client – the bank also believes in them".
Barak Sasson explains that the banks have many reasons for refusing clients, including poor credit card history, checks that have bounced in the past, restricted bank accounts or execution order cases. Sometimes the problem is the property, such as for example, when the apartment is divided into a number of sublets or other kinds of building irregularities.
Applicants who have been refused a mortgage have difficulty coping with the banks independently, and even when they manage to receive a mortgage, they may not receive the best terms. "The mortgage consultant’s job is first of all to help clients receive the best deal that saves them money, and in addition to give them tools to handle the mortgage in the long term", explains Barak Sasson. “Contacting a professional gives the client peace of mind. I work around the clock and I am always available to clients so that they can be calm and confident. People are frightened of mortgages, but I maintain that you don’t need to be if the mortgage is managed wisely and responsibly".
How does the process with the bank work?
"I learn about the client, all the details and the data, and then I contact the bank and present a financial picture, as clients do not always know to explain themselves. My yardstick is: 'If I have managed to convince myself that this is a good client the bank can also understand it'. While banking sources are recommended, there is also the option of seeking non-bank sources, which are an additional alternative for taking out a mortgage. In cases where the bank does not approve a mortgage it is possible to take a non-bank loan. This option is not suitable for every client, but is an excellent solution. The secret is tailoring it to the individual: each client and their needs and abilities".
Recycling a mortgage: How to save a lot of money
Barak Sasson also advises and guides clients who already have a mortgage and want to improve the existing terms. An example of this is recycling a mortgage: paying off the existing loan to take out a new one with better terms. "Consulting is a service that first of all aims to reassure clients and let them know they are being looked after", says Barak Sasson, "The consultant is actually the client’s face in the bank. The consultant also knows how to translate the client’s data into the bank’s language. If there is understanding the terms will substantially improve".
When is it a good idea to recycle your mortgage?
"Recycling your mortgage is recommended once every few years at least. In any case it is important to negotiate in order to acquire the best terms you can at the time. The better the initial terms of the mortgage and the better the choice of tracks, the cheaper the future fines. There are cases where recycling six months after taking out a mortgage is recommended. Examining this possibility is always recommended because the market is dynamic and doesn’t stop changing".
In cases of paying off the existing mortgage and exchanging it for a new one it is also important to consult a professional, as this is a process that involves high fees, whereas a professional can demand better terms from the bank. "I recommend examining the terms of your mortgage once every two or three years. In the past two years specifically, there has been a decrease in interest in the market. Competition is very healthy and combined with the new prime law it pays to recycle", Barak Sasson explains.
He adds that in the first wave of the COVID-19 pandemic there was an increase in interest rates, and therefore clients who took out a mortgage at that time have already contacted him in order to recycle it. "People who had to took out a mortgage in the first wave, when the pandemic broke out and the banks and the state didn’t know how to cope with it or with its financial effects", Barak Sasson explains, "but today the situation has returned to what it was previously. Today we are in a very good period and therefore it is worth examining recycling. I predict that interest will rise soon, and so it is a good idea to recycle as soon as possible".
Barak Sasson adds that a mortgage is a financial commitment for many years, but not for a lifetime, and in the end, after it ends the property remains. "A client who comes into my office is sure that this is a deal for life, but I promise them that not only will they pay it in full, they will also recycle it several times".
Who is mortgage consulting suitable for?
"Everyone, from young couples to elderly parents who want to help their children buy an apartment. The advice is suitable also for self-employed people and investors where it is a second or additional property".
Barak Sasson explains that in the case of investors "There is a correct way to build a pension through purchasing apartments for investment, where the money from renting them serves as passive income. Retirement can arrive quickly, and many people who have not planned for it find themselves with a low pension, which does not match their way of life. In this case, too, it is worth contacting a mortgage consultant who knows the taxation laws on second or additional properties. The planning needs to be done meticulously".
When opportunities occur, it is also important to carefully examine the transaction for purchasing the apartment and the mortgage terms, for example, when purchasing an apartment in the framework of the Mechir Lemishtaken (Buyer’s Price) scheme – a government scheme that enables couples or individuals over 35 to purchase an apartment with a significant discount.
"The scheme is intended for young couples who buy their apartments on special terms: 90 percent of the contract, or 70 percent of the market value, which is in practice the actual value of the apartment without the Mechir Lemishtaken discount", explains Barak Sasson, "In this case as well, we recommend consulting an experienced professional in the field. A Mechir Lemishtaken transaction is different from what is usual in the market, it is necessary to know how the property is priced and how to implement the transaction. Apartments in the project are purchased during construction, and therefore the deal must be signed in parallel to paying rent. There are schemes that are worthwhile, such as grace for payments, when you begin to pay only the interest, in order not to crash financially during the waiting period".
He adds that although this is a government scheme, you need to carefully examine taking a mortgage in the framework of Mechir Lemishtaken, and explains: "People who take themselves to the edge when determining repayments and do not take into account their capabilities can crash financially.
"On the other hand, this is the best example of healthy mortgage recycling. In Mechir Lemishtaken the clients receive the apartment with a discount that is known in advance, while recycling takes place on the real value of the property. It is possible to recycle the mortgage and receive terms that are almost certainly better".
In conclusion, Barak Sasson notes that because this is a major and significant commitment, anything connected to handling a mortgage should not be taken lightly: "Correct, professional conduct can save unnecessary spending of large sums of money".
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