Mortgages for Apartments or Houses Purchased as an Investment
There are many possible investment programs: savings accounts, deposits in NIS, the stock market, and foreign currencies, to name a few. Each has its own risk level and potential profit. And we have all learned as the years went by that putting all of one’s eggs in one basket isn’t very wise.
Since we know investments must be split into several programs or routes, and as buying real estate has been a cultural norm for many years in Israel, over 35-40% of Israelis think of real estate as an additional investment route. Investing in real estate is known to be a conservative investment route, which somewhat balances the entire investment portfolio. Such an investment can be easily monitored, and promises a good potential for ongoing yields as well as capital profits when selling.
Buying real estate can be motivated by two main purposes: one is to obtain high yields by renting out the apartment or house, and the other is to guarantee high capital profits by quickly selling the property. In both cases, the goal is maximum profits with a minimum investment.
This goal, we must say, has met a supportive market environment. Mortgage banks and insurance companies offer lower interest rates for this purpose than the rates offered for any other type of loan or capital procurement. Usually, high equity is not a requirement.
Recently, a new collaboration has been launched among the Leumi Mortgage Bank, Reshef Real Estate (a real estate broker) and EMI (a credit risk insurer) with the purpose of focusing on the market of real estate purchased for investment. This program is expected to offer a funding rate of up to 95%.