Thursday, February 10, 2005

Three Falafels and a Mortgage

We’ve got some good news: we bought a house.

Yes, after 10 years of renting in Israel and seven before that in California, Jody and I have finally joined the ranks of the home owners. There’s only one thing still in the way:

Getting a mortgage.

Since we never had to apply for a home loan back in the old country, I can’t share any insights on transcontinental cultural and bureaucratic differences. I hear it’s pretty nasty anywhere in the world.

All I know is that, here in Israel, securing a mortgage is a tongue-twisting, nerve shattering matter of luck, timing, and sheer tenacity.

Here’s our experience.

First of all, there are a dozen or so banks offering mortgages and every one of them, it seems, proffers a slight twist, making it hard to do a straight comparison. With advice from friends, we hit the pavement (reservations not required...nor, in most cases even allowed).

We started with the bank where we have our home checking accounts: First International Bank of Israel. The mortgage department consists of two clerks (this we’d find was standard at all the banks). Of those, one was seeing a client. The other was speaking heatedly into the phone.

From the paper in her hand, though – she was waving around her car registration and driver’s license – it was clear she wasn’t conducting bank business.

OK, it happens. But this went on for a good ten minutes. She never looked up, never motioned to us to sit down or made one of those apologetic gestures indicating she was trying her best.

When she finally hung up, she glanced in our direction, cranked up a fake smile and turned on the sugar and spice.

We were not impressed.

We did, however, get a good primer into how the system works. There are three main options: loans linked to the prime index (which can be changed every month), loans linked to the dollar (which can be changed every three or six months), and fixed interest loans which, despite how it sounds, aren’t really fixed because they’re linked to increases in the cost of living index...that is inflation.

In other words, there is no way of actually locking in an interest rate and knowing what it will be for the next twenty years.

There’s also a new immigrants loan (zakaut) that has a very low interest rate, runs for a whopping 28 years and reportedly some of it even becomes a grant.

And, oh yes, you can take a mix of the different programs in any way you want.

Heads throbbing, we did what we were told to do next – get a quote in writing that we could take to another bank to get an even better deal.

“Oh, no, there’s no such thing,” Ilana the clerk told us. “You’ll just have to trust me. Don’t worry about it. I’ve been working in this bank for 25 years.”

And then she added that ever so Israeli phrase that countenances no argument: “y’hiye beseder" – it will be all right.

Next...

Our second stop was Bank Hapoalim. Our cler, Ella, was more genuine, but kept adjusting a frumpy hat that sat loosely (too loosely I thought) on a head of dirty blond hair as she mumbled her way through rates and regulations.

Ella, unlike Ilana, offered to open up a file for us right on the spot. She printed out a wad of papers and told us where to sign. Staring at 50 pages of small Hebrew text, we did as we were told, not sure whether we’d applied for a mortgage or rented out our children for slave labor...working as loan clerks in a dingy downtown bank.

As this had taken close to three hours, we treated ourselves to a falafel, Israel’s national fast food. The joint was packed and in a good location, just opposite Jerusalem’s famous outdoor market – Mahane Yehdua.

The french fries were soggy but the price was cheap. Was this a hint: that when it came to our mortgage, price trumps quality and service?

“At least we don’t have to calculate interest rates for the falafel,” I quipped. Jody didn’t laugh.

The next day, we headed downtown again. We visited two banks – Tefahot and Adanim – which both left us as cold as our falafel the day before.

Our final stop was Bank Leumi which proved to be a welcome change. Dafna wore a bright expression and presented herself as extremely professional. Everything about her – from the way she explained the process clearly – in English, I might add – to her clothes and make up were put together just right. She’d get back to us within two days with an answer to our request.

We treated ourselves to another falafel as a reward. Things seemed to be looking up. The meal from the Yemenite falafel stand on HaNevi’im street was fresh and hot with a tangy sauce that seriously burned my mouth. Just the way I like it. (Only later did I realize that this falafel stand had been blown up by a suicide bomber in July 2002.)

Dafna called a day early to say our loan had been approved and would we like to set up – what’s this – an appointment...boy, someone had trained this bank in customer service!

In we went, ready to make a deal. Our friends told us that it was at this point, when offers are on the table, that you can really negotiate. We had decided on a mix between prime and fixed. I was sure Dafna would come down a couple of points on one or both.

Dafna didn’t budge. What she’d offered was a very good rate, she said, and the bank had the most flexible early pay back terms.

We headed back to Ella. Could she beat Dafna’s offer? "Absolutely," Ella said, wiggling a different yet equally frumpy hat. "Just give me a day or two to get it approved."

Well, this went on for a week. Playing one bank against the other. Slowly squeezing the rates down .001% at a time. For what? A difference of $10 a month. Although as Jody, our family’s financial wiz pointed out, over 20 years would add up to a tidy two grand. And $10 covers a movie and maybe even a small popcorn!

Finally, perhaps out of pure exhaustion, we decided to go with Dafna. Her rate was still too high, but she was the most pleasant to sit across a desk from.

We headed downtown and began collecting the final papers. We walked out with a stack of documents for our accountant and our lawyer, two forms to get notarized, life insurance to take out (more on that next time), the phone number for an assessor.

We felt overwhelmed but satisfied with our decision...or at least that we’d made a decision.

No sooner had we left the bank when Ella called on the cellphone. We told her what we'd agreed to. "I can beat that by another 2 points on the fixed and .01 on the prime," she implored. "You haven’t signed anything yet...have you?"

I felt duped. A freier – the Israeli epithet for sucker. Taken in by a pretty face and a smattering of English. Once the loan was secured, we’d probably never see or speak to Dafna again.

I called Dafna. “OK, I know you don’t have to do anything here, but could you get us just a little bit more.” My argument didn’t even convince Jody, but Dafna said she’d try. We continued with the paperwork, our faith in Israeli bureaucracy hanging on this last test.

Dafna met us half way. And she agreed to waive the processing charges, which was worth at least $250 off the top. Maybe it wasn’t the best over the long term, but we wouldn’t have to start all over again, thank God.

On our final day, after we’d brought in all the signed papers, we treated ourselves to one last falafel. But not just any falafel.

We’d heard about a little take-away place on Shamai Street that makes “sabich” – an Iraqi version of the falafel. Instead of chickpeas, it has hot hardboiled egg and fried eggplant with spicy amba (mango sauce) in a freshly-baked pita. It was delicious. A fitting toast to our own grilling experience.

We don’t move for another year (long story...rental contracts that can’t be broken), but the mortgage part of the process is just about over.

So, if you’re ever in Jerusalem, drop us a line. We can tell you where to go for a mortgage...and for falafel.

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