הדוחות הכספיים של התאגידים הבנקאיים וחברות כרטיסי אשראי

Surveying the market and examining the possibilities offered by the various banks helps borrowers make decisions under optimal conditions, in order to match their needs and repayment capabilities.

The Competition Authority has found that price comparisons lead to lower prices, and that the more a borrower compares, the lower the average price will be. Thus, a single price comparison leads to an average decline of 7–8 basis points in price, while four comparisons lower the price by an average of 16-20 basis points.

An approval in principle is a document in which the bank presents its approved price quote for a mortgage. One of the improvements made by the mortgage transparency reform is that the approval in principle is now a more detailed document with a uniform structure at all banks.

Due to the reform, the request for approval in principle and accompanying documents can be sent online, and it is not necessary to physically go to the bank. The bank is required to send the customer its approval within 5–7 business days from when the mortgage request is submitted.

The new approval in principle form is comprised of three parts.

The first part, which appears at the top of the document, includes details on the borrower’s identity (name and ID number), details of the property, the requested loan amount, and whether guarantors are required for the loan.

The second and main part presents three uniform baskets that the banks are required to offer, in accordance with the mixes and other conditions set by the Bank of Israel. The approval may include an additional offered basket that will be composed according to the customer’s request.

The third part includes a number of variables that are intended to enable the borrower to better understand the financial significance of the offer he receives, and to make it easier for the borrower to compare it with other offers. These include the total forecast interest, the amount of the initial monthly payment, the amount of the highest expected monthly payment according to forecasts, and the total amount the borrower is expected to pay until the end of the loan period.

The approval in principle is valid for 24 days from the date it is issued. During that period, the bank is bound by the terms it has offered, with two important conditions. The first is that the information provided by the customer is correct. The second is that should there be any changes in the Bank of Israel interest rate, those changes will affect the prime interest rate in line with the margins approved in the approval in principle.

An assessor’s valuation is an assessment of the property’s value by an authorized assessor. The valuation is done in cases where the bank requires it. It serves in the approval of the loan’s financing rate relative to the value of the property (LTV rate). In cases where the assessor’s valuation is higher than the price of the property, the LTV rate will be set in accordance with the price of the property.

The LTV (loan-to-value) rate is the ratio between the approved mortgage loan and the value of the property. The value is set according to the price of the property or in accordance with an assessor’s valuation, as determined by the bank.