Aryeh Strickoff, Senior Mortgage Broker / Currency Specialist

Having a reliable service to bring over funds from overseas and exchange to NIS is a very important element in the process of purchasing a property, and it is not as simple as it might seem. Whether the funds are for a down-payment, or for a full purchase price, you need a process that is inexpensive, that is reliable, that sees the funds arrive on time and that is stress-free (and it can be quite stressful when going directly through the banks).

The process of bringing over funds has several steps.

· First: It begins with the compliance stage, where the client must show the overseas source of the incoming funds, and the destination of the funds in Israel. Over the years, Israel has been plagued with money laundering schemes, and as a result has run into issues internationally, most notably with the IRS in the United States. Therefore, regulations now require strict documentation showing that the source of funds and destination of the funds are ‘kosher.’ The documentation usually consists of a letter from one’s accountant and lawyer. The compliance process takes several days to about a week.

· Second: Once approval is received, funds can be wired from the source bank overseas to the destination account in Israel. Depending on the source bank, there might be a wiring fee by the source bank. It usually takes several days to a week or more for funds to arrive.

· Third: When the funds arrive, they are converted to NIS and deposited in the designated account.

Different ways of bringing over funds:

The main methods of bringing over funds are via a bank directly, or through a foreign exchange company.

Why using a bank is generally not recommended:

· Fees: Banks charge an inordinate amount of fees. For example, they charge a receiving fee just for receiving the funds. They also charge a conversion fee for the action of converting to NIS. And then they also take a percentage of the conversion itself. Sometimes there are other fees as well.

· Timing: There are often delays when funds come through an Israeli bank.

· Customer Service: If there are issues that arise (and they do arise), it’s not easy getting in touch with a representative at the bank who can help you. It often requires multiple phone calls, being transferred from one department to the next, and then discovering that after being told that an issue is resolved, that it in fact was not resolved, and having to start the whole process again with the phone calls and emails etc.

· Payment Threshold: Banks usually have a threshold, such that if you want to make a payment out of your account that is above that threshold, you must confirm and authorize it. That process, while sometimes operating smoothly, often gets caught up in a bureaucratic approval process, which can cause delays and major headaches.

Why it is recommended to use a company like Wirepay Israel to bring over funds:

Personally, I recommend Wirepay Israel, a company which avoids many of the stresses of the banks.

· Fees: We don’t charge any of the extra fees the banks charge. We only take a small percentage of the conversion itself. That’s how we make our money. And the percentage we charge is smaller than you will find at the banks, and pretty much with most other currency exchange companies. The only time we charge a fee is for conversions of $US10,000 or less, where we charge a small $30 fee.

· Timing: Through our process, our clients’ funds arrive faster than transferring via a bank.

· Customer Service: Our customer service is the best in the industry. We aim to be as accessible and reachable as possible, and all of our agents are native English speakers.

· No Payment Threshold: At no extra charge we can make payments for you directly. This is often helpful when a client has not set up a bank account in Israel yet, but even more helpful in that when large payments have to be made, it won’t get tied up in a bureaucratic approval process. Once we receive approval from our client to make a payment for them, the payment is made.

· Expedient Service: We work to make the process seamless, easy and stress free for our clients

· Registered and Compliant: We are fully registered and compliant according to the law.

· Track Record: WirePay Israel has been in business for more than 18 years with a very happy and satisfied customer base.

So reach out to WirePay Israel for all your transfer needs!

Using a mortgage broker when purchasing property in Israel is a must. For many coming from abroad, there are many nuances both culturally and systemically in how the Israeli banking system works, which are quite different from the way things function in other western countries. This can make the mortgage process hard to understand, navigate, and negotiate.

Some important differences of note:

· There are no mortgage contingencies in Israel: In the US, the purchase contract is first signed. Then the purchaser has a certain amount of time to obtain a mortgage. If the mortgage is not forthcoming for whatever reason, the purchaser can back out and have their down-payment refunded. In Israel, once you sign your contract, you are tied to it. If later you find out that the bank will not give you a mortgage, you can lose your down-payment. For this reason, a mortgage pre-approval becomes very important, and a mortgage broker will be able to walk you through the process.

· You cannot roll your closing costs into your mortgage in Israel: In the US, you can have the bank pay all of your closing costs, and simply add it to the principle of your mortgage. However, in Israel you cannot do that. So, when budgeting your available funds for a down-payment, you must also consider the amount you will need for closing costs. There are sometimes separate bank loans that can help cover some or all of your closing costs. A mortgage broker can help explain the costs, explain all the options, and help with coordinating the bank loans if applicable.

· Mortgages in Israel are limited by age: Banks will generally only lend to age 80 or 85. So if you are 65 years old, the maximum term you will be able to get for a mortgage will be between 15–20 years. There are sometimes ways to work around this a bit, and your mortgage broker can help guide you.

· Banks are limited by law as to the amount they can lend you: For example, for a first time Israeli homebuyer, they can lend you only up to 75% of the price. For a foreigner, the limit is up to 50%. However, there are ways of obtaining additional funding up to 85% for both Israeli residents and foreign buyers, and one instance where 90% is possible. Your mortgage broker will help you with all of this.

· You can mix and match different types of loan products within one mortgage, but watch out for ‘linked’ products: In other parts of the world, the ’30 year fixed’ mortgage is the gold standard. In Israel, a 30 year fixed is available, but it’s not the necessarily the best option for all borrowers. There are also variable rate options, adjustable rate options, and even USD$ and Euro options. Each have their advantages and disadvantages, and it often makes sense to hedge the advantages and disadvantages of each by combining several products within your mortgage. A mortgage broker will help guide you through this. One important aspect that the banks often neglect to tell you, is that these different products are available as either ‘linked’ or ‘not-linked’ to the inflationary index. It’s important to understand the repercussions of each. Sometimes linked products can make sense, but if not weighed carefully, it can turn what looks like a cheaper mortgage on the surface, into quite an expensive one.

There are of course many other points of note and pitfalls to avoid when taking out a mortgage in Israel. That is why it is so important to use a mortgage broker. The benefits gained will more than justify the expense.

My goal as a mortgage broker is to alleviate the stress involved as much as possible, by guiding my clients through every step. With my previous experience as a lawyer in the US and now working within the Israeli banking system, I understand both systems in language, culture and process, and help bridge the gap for my clients, so that they feel comfortable and confident in their Israel purchase.

Moreover, I provide an American style and level of service, where I make myself accessible and available whenever needed. I understand what those coming from abroad are concerned about, and I know where they are coming from. And using the connections and relationships I have built with all of the banks, I work to get my clients the best deal for their situation.