Recently the trend of buying land and then engaging in self-construction is again developing in Israel (after the dwindling of this practice in the late nineties and early 21st century).

The idea of a dream house with a garden perfectly designed by an architect tempts many Israelis to renounce the usual plan of purchasing a new or second hand apartment / house and get into the complex process of buying land and engaging in self-construction.

The complexity of this process is reflected in many aspects, among others funding. And as nearly always, our means are usually insufficient, so again we find ourselves in need of a mortgage.

Banks and insurance companies employ different policies in providing mortgages, depending on the property’s location, registration aspects, funding percentages for each phase, the property’s estimated value, etc. One must take into account the fact that such mortgages are usually provided in phases (money is provided for the purchase itself, and then additional funds are released as construction progresses). This makes the mortgage’s stability somewhat doubtful, as a result of changes in interest.

If this is not enough, consider that according to a survey conducted by the Building College, more than one half of the families engaging in construction significantly deviate from the original budget (110,000 to 140,000 NIS). Many others exceed their budgets less dramatically.

Preplanning the mortgage, employing a reasonable safety margin with the financial institution throughout the entire process, and laying an emphasis on the correct types of mortgages for specific points in time – can all ensure our success.