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There are many places in Israel where housing prices are very low. Both in the periphery and in the center. Here we need a bit of luck. If we find ourselves in an area that is under development or will soon be evacuated, we may significantly upgrade the financial situation of our children. Keep in mind however, that our children will have to live in these places or rent them at a relatively low price as long as the situation in the region has not improved. Buying a property “on paper” is usually cheaper and is often mentioned as an option for those who lack the means. However, it should be borne in mind that buying a property on paper even though it is cheaper may in the end not pay off because this property can not be leased when it is built – a process that may take several years. Purchasing groups also promise cheap prices, but there is a risk that their legal status is poorly regulated and certain laws do not apply to them.

In summary, one must first understand the needs of the children – the number of rooms and place of residence. Second, their earning ability must be calculated against the equity and the ability to repay the mortgage, and in the end a strategic decision must be made.

Earning Equity

It should be remembered that today the price of an asset in Israel has long passed the threshold of one hundred salaries. However, still every shekel saved before buying the property will not be part of the mortgage and will not accrue interest and thus become a net profit. Even if we increase our equity from 20% to 40% by slow and calculated savings we will save substantial amounts.

Taking a Mortgage

This is the preferred and default option for most Israelis. Keep in mind that this is one of the most affordable loans we can get in the market. However, this is still a large sum of money and we will need professional advice to get the best possible mortgage. It is highly recommended to bargain with the banks and compare different offers. Keep in mind that the spread of the mortgage as long as possible will ultimately result in higher cost due to the interest rate. Of course, if our children can rent the house so that it will cover the cost of the mortgage while they will have a cheaper housing solution they will also be able to absorb the cost of the mortgage more easily.

Buying a cheap property.

There are many places in Israel where housing prices are very low. Both in the periphery and in the center. Here we need a bit of luck. If we find ourselves in an area that is under development or will soon be evacuated, we may significantly upgrade the financial situation of our children. Keep in mind however, that our children will have to live in these places or rent them at a relatively low price as long as the situation in the region has not improved. Buying a property “on paper” is usually cheaper and is often mentioned as an option for those who lack the means. However, it should be remembered that buying a property on paper even though it is cheaper may eventually not pay off because it can not be rented when it is built – a process that may take several years. Purchasing groups also promise cheap prices, but there is a risk that their legal status is poorly regulated and certain laws do not apply to them.

In summary, one must first understand the needs of the children – the number of rooms and place of residence. Second, their earning ability must be calculated against the equity and mortgage repayment ability, and in the end, a strategic decision must be made whether to buy a home in the area in which they want to live or in a future area.

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