Please note: advisory meetings and the service itself are provided in Hebrew only. These guides are here so you can read and understand the topic in your own language.
The self-employed get mortgages every day, but the bank examines them differently. The main difference: an employee's income is clear from the pay slip, while a self-employed person has to prove it.
What the bank checks
- Annual reports and tax assessments – usually for the last two to three years.
- An accountant's confirmation of income in the current year.
- Bank statements – personal and business.
- Stability – how long the business has been active, and the trend.
The challenge: low declared income
Many self-employed people reduce their reported income to pay less tax. That is legitimate, but the bank looks at the reported income. Anyone planning a mortgage should think about this one to two years in advance.
Fluctuating income
When income jumps between years, the bank will usually calculate an average, and sometimes take the lower year. One weak year can reduce the amount.
How to prepare
- Order in your reports – reports submitted and assessments closed.
- Separate business and personal accounts.
- A clean bank account – no overdrafts beyond the limit.
- Proven equity – money that sits in the account and not "in the business."
Elia's tip: Talk to your accountant before the year you apply. Sometimes a small change in tax planning can significantly increase the mortgage that will be approved.
More: how the bank calculates your mortgage, the documents checklist.
This article is general information and is not personal advice or a commitment. Rules, interest rates and taxes change from time to time, so check the current situation and your own figures before any decision.