Did you know that your home is not just a place to live, but also a powerful financial asset? Discover how you can use the equity accumulated in your property to advance to your next goals.
Feasibility Check for LeveragingLeveraging an existing property is a financial process where property owners use the "trapped equity" in their home (the difference between the market value of the property and the remaining mortgage balance) to obtain additional financing from the bank. This action allows you to raise significant capital under mortgage loan conditions, which are usually significantly better than regular commercial loans.
In the process of professional mortgage consulting, we examine the viability of the move, the family unit's repayment capacity, and the purpose of the funds, to ensure that the leverage indeed serves your long-term economic interests and does not endanger the existing property.
One of the most common purposes. Using the equity from the first apartment as a supplement to the equity required for purchasing a second apartment. This is a central tool for real estate investors looking to expand their property portfolio.
Many parents choose to leverage their property to help their children purchase their first apartment (initial equity). This is a way to transfer intergenerational wealth in a smart and calculated manner.
Closing short-term and expensive loans (overdrafts, credit companies) and consolidating them into the mortgage at lower interest rates and longer terms, significantly reducing the monthly repayment.
Comprehensive renovation that increases the property value and improves quality of life. The bank views renovation as a legitimate purpose for financing under housing conditions (in some cases).
Before starting, it's important to get mortgage consultation for a first or second apartment to understand the tax implications. Leveraging an existing property to purchase an additional property exposes you to second apartment purchase tax (from the first shekel).
The Bank of Israel has set clear limits on the scope of permitted leverage, and it's important to know them:
As part of the mortgage consulting process, we know how to structure the application optimally with the banks, and examine creative solutions including non-bank financing in appropriate cases.
Leverage is a great tool for growth, but it also carries risks. Increasing family debt requires precise planning and financial discipline. A calculation error can lead to cash flow difficulties and unnecessary economic pressure.
Will the rent from the new property cover the loan repayment? What happens if the property stands empty? We build extreme scenarios for you to ensure you're protected.
Proper combination of tracks (prime, fixed, variable) is critical in leverage. The goal is to create stability in monthly repayment and prevent excessive exposure to interest rate and index changes.
Every leverage loan should have a completion plan. Is the goal to sell the property in 5 years? Is the goal retirement? The answers affect the loan structure.
Don't make complex financial moves alone. The expert team at "Mortgage in Pajamas" is here to build the safest and most profitable leverage strategy for you.
Schedule a Free Consultation Call