As most people in Israel have begun to re-emerge out of quarantine and back to work, we will continue to see the effects of the Corona pandemic on the economy and our way of doing business. Some of the most important changes have been with banking and mortgages. Trusted House (virtually) sat down with mortgage consultant Yoni Hyman to discuss some of these changes. Below are some of the main points and the practical takeaways:
1. When the pandemic began, interest rates on mortgages were fluctuating, and banks were more cautious in approving mortgages.Those with existing mortgages were generally not affected.
Advice: If you’re considering taking out a mortgage, ask your broker what they expect your rate will be.
2. After a few weeks of relative stability, the banks figured out how to manage their risk, and gradually started lowering the rates again.
Advice: If you took out a mortgage during this time, call the bank or your mortgage consultant to re-negotiate your rate.
3. Individuals with existing mortgages who were furloughed or lost their jobs can be given a 3-4 month forbearance on their mortgages, depending on the bank. There are no penalties, but it means that your monthly payments will go up.
Advice: Call the מוקד שרות לקוחות - customer service center at your bank, and ask them to freeze the payments on your mortgage if you need to. If you don’t need it, don’t do it. But if you might default on your mortgage, definitely do it.
4. The banks have reacted to the pandemic and the recovery very differently.
Advice: Make sure to always shop around and negotiate with a number of banks or have a mortgage broker do this on your behalf.
5. If you’re on unpaid leave but can show that you are expecting a certain income when things normalize, the banks may be willing to recognize your projected income.
Advice: If you signed a contract and are supposed to start paying soon, but currently have no income, you should check with a consultant if this is an option for you.
6. Banks have been adapting to the need for remote banking. When relevant, many banks can even approve your mortgage over a video call and have you sign and scan them documents.
Advice: If you are in quarantine or at high-risk of being affected by the virus, ask your banker for this option.
7. The banks are just starting to go back towards 100% capacity, so everything is taking longer.
Advice: Be patient but persistent. Make sure you have your banker’s email, and you are more likely to get on the phone with them if you ask them to call you.
To set up a consultation with a mortgage consultant click the link below!