First-Home Mortgage: The Complete Guide for Couples and Families Buying Their First Home

Buying a first home is one of life's most exciting moments, but also one of the most complex. A first-home mortgage involves dozens of decisions, unfamiliar terms, and enormous pressure from the banks and sellers. Mistakes at this stage can stay with you for 30 years. This guide walks you step by step through everything you need to know before taking a first mortgage: equity, pre-approval, the mix, and the common pitfalls.

How Much Equity You Need for a First Mortgage

The key rule: for a single (first) home, the Bank of Israel allows financing of up to 75% of the property's value. That means you need equity of at least 25% of the home's price, plus additional costs.

Do not forget the extra costs that many overlook:

• Purchase tax (a first home has exemption brackets and reliefs)
• Attorney's fees
• Broker's fee (if relevant)
• Appraisal
• Moving and renovation costs

Preparing a realistic budget that includes all of these is part of proper financial planning before the purchase.

Pre-Approval - The First Step Before House Hunting

A common mistake: falling in love with a home and only then rushing to the bank. The right order is the opposite. A mortgage pre-approval gives you:

• Certainty about the amount you can raise
• Bargaining power with the seller ("I am a serious buyer with arranged financing")
• Peace of mind during the search

A pre-approval is usually valid for 90 days and can be extended. It does not commit you, but it gives you a solid foundation.

Stages of the First-Mortgage Process

Stage	What happens
1. Diagnosis and planning	Checking equity, repayment ability, and setting a budget
2. Pre-approval	Approaching banks and getting a financing framework
3. Search and purchase	Finding the home and signing a contract
4. Building the mix	Planning the suitable mortgage mix
5. Negotiation and final approval	Comparing banks and negotiating terms
6. Signing and registration	Loan agreement, insurance, and property registration

How Much Mortgage You Can Repay

The bank will check that the monthly payment does not exceed about 40% of your disposable income. But that figure is a ceiling, not a target. Aim for a comfortable payment that leaves you room to breathe for life, savings, and unexpected scenarios.

An important tip: do not stretch yourself to the limit. A first home is usually not your final dream home, and it is better to start with a sustainable payment than to enter ongoing cash-flow pressure.

5 Common First-Mortgage Mistakes

• Not comparing banks - the offer from the bank where you hold your checking account is almost never the best.
• Focusing only on the rate - a poor mix is more expensive than a slightly higher rate.
• Stretching the payment to the limit - with no safety cushion for scenarios.
• Forgetting the extra costs - purchase tax, attorney, appraisal.
• Going without professional representation - negotiating alone against the bank's experts.

Why Professional Representation Matters for a First Mortgage

When you take a first mortgage, you face a banker who does this every day. A private mortgage consultant balances the power gap: building you the right mix from the start, negotiating among several banks, and preventing the mistakes that follow borrowers for years. For a first home, where every decision is made from scratch, this guidance is especially critical.

Frequently Asked Questions About a First-Home Mortgage

What is the minimum equity for a first home? At least 25% of the property's value (financing up to 75%), plus additional costs.

Should I get pre-approval before finding a home? Absolutely. It gives you certainty about your budget and bargaining power with the seller.

How long does the first-mortgage process take? From diagnosis to receiving the funds, usually a few weeks, depending on how quickly you find a home and the complexity of the file.

The First Step - A Free Diagnostic Call

The right way to begin the journey to your first home is with a free initial diagnostic call, with no obligation, in which we will check your equity, repayment ability, and realistic budget. Booking a diagnostic call is the first step.

Gil Finance guides couples and families through buying a first home: a consultant licensed by the Ministry of Finance, a former senior banking manager at Bank Leumi with over 19 years of experience, deputy chair of the audit committee of the Israeli Mortgage Consultants Association, and a 4.9-star rating across 81 Google reviews. Guidance from the start to handing over the keys, full transparency, and a strategic approach. The first consultation is free.