Crossing the Yarden

By Yarden Frankl

Fixing a Mortgage

While we may not be on the verge of completing the building of our home, we may, possibly, be on the verge of completing the financing of the home. I consider this a major step forward. Now we don't yet have the mortgage, but I am told just one more piece of paper and we should be all set…

We took out mortgages several times in the States. There really was never a huge amount of choices. You were just told the rate, what your payment would be for the next thirty years and where to sign. We did have to sign about fifty pages certifying that we understood the legal jargon on each page which no one understands. But that was easy.

When we first met with a mortgage banker here, she gave us a long sheet of needed documents. It was a bit like a scavenger hunt although instead of items like a pair of blue gloves and a tennis racket, you had to get documents attesting to the fact that you had asked for other documents attesting to the fact that you did not yet own the home you were attempting to buy.

Just when I though we had everything together, we got to select our mortgage. The banker presented us with several mortgage options. One choice was a fixed mortgage rate, the next was tied to the dollar. Then there were more mortgages that were tied to various things. There were mortgages tied to the Shekel, the Pound, the Euro, the per capita debt consolidation index (whatever that is), the price of gold, and the freshness of the oil at the corner falafel stand.

Being used to the American system, I was a bit bewildered by all these options. The one part I understood was that under all these plans, I really would not have any clue each month as to how much money the bank was withdrawing from my account. (You have to just love the Israeli banking system.)

I suggested that the "fixed" mortgage was more my style. Maybe a little higher rate, but I would at least know what my mortgage payment would be all the time. Now since I have been in Israel almost two years, I knew I should make sure we were clear about the nature of a "fixed" rate.

"So this rate here. This will never change?" I asked.

"Correct. The rate will be the same for the life of the mortgage," was the answer I was hoping for.

Just as I was about to sign. I heard her add, "the rate remains fixed. But of course the amount you pay each month changes."

Wait a minute. What the heck does that mean? How can the amount I pay on a fixed mortgage change?

"This is not like in America. Everything changes. But this one is "fixed". It doesn't change much. It's a good mortgage."

I asked what would happen if I paid some of it off early. She shook her head and patiently explained that I would have to pay a very large penalty for doing that. Of course, she could not tell me what the penalty was, only that she could give me a different mortgage in which there would be no penalty if I paid it off early. On the other hand, that mortgage was definitely not "fixed" and the rate would really change a lot. (I love these technical banking terms like "a lot" or "a little.")

So we used the buffet approach and took several different mortgages that looked appetizing. Then, just like in America, we got to sign. It really didn't matter that the documents were all in Hebrew, it's not like I could have understood them if they were in English. All I know is that there must have been over one hundred lines demanding our signature, proving that we knew exactly what we were getting into. Is this how Oslo happened?

When we finished signing I smiled and leaned back and asked them to fill up a bag with my money. Fine, I was told. But wait. You just need to get one or two more documents. There's just one small catch. One you need to get from an office in Tel Aviv, and the other from a cave in Mongolia.

Well, at least we are getting closer…I think!

Shabbat Shalom from our blessed nation

© 2007 Yarden Frankl