Banks require high collateral, so a mortgage loan may be of interest to you. For employees, payslips are used as proof of income, while for the self-employed the banks demand annual statements and profit and loss statements. This guide seeks to explain what self-employed people should consider when choosing a mortgage lender and what documents must be provided to apply for a loan. have a good credit rating; have their domicile, workplace and payroll account in Germany; have a stable monthly income – eg as a worker, employee, civil servant, pensioner; are self-employed: raising capital for real estate owners as a loan. Their individual situation is crucial for the bank: for example, civil servants can expect different conditions for mortgage loans than self-employed persons.
Which self-employed should be considered when financing real estate?
In the real estate financing business, the question of whether the borrower can afford the monthly repayment installment in the long term is of crucial importance. As a rule, aside from the current cost of living, after deducting the financing rate, there must also be sufficient reserves for the planned or unplanned investment projects.
In the examination of real estate financing, credit institutions also rely on job security in addition to mere income. The situation is different with freelancers or self-employed persons who plan to finance real estate. Nonetheless, self-employment real estate financing is not impossible, even though credit institutions see fluctuating returns as risk factors.
As is the case with employment, the currency also applies to the self-employed: the further the existence of self-employment, the smaller the risk of problems in the coming weeks or years. For documentation purposes, self-employed persons usually apply for financial statements for the last two to three years and ongoing business analyzes when applying for real estate financing.
For the self-employed, this applies not only to the review of the loan application, but also to the overall concept of financing real estate. Because of the frequent fluctuations in income, it is advisable not to go to the limits of the loan amount, but to keep enough reserves open for worse years. In this case, real estate financing in good yield times can be paid off more quickly than previously provided.
Mortgage loans for the self-employed
If you are self-employed, it is difficult for you to get a loan, especially if you take in a large amount of it. Nevertheless, if you are self-employed, you do not have to insist on a loan waiver. For banks, higher security deposits are required, so a mortgage loan may be of interest to you.
The interest rates on mortgage loans are currently quite low, you should take advantage of this opportunity. A mortgage loan is a long-term mortgage loan secured by a lien. With a mortgage loan you promise a property, this can be your home or your business premises. Because banks can use the proceeds of the forced sale of the property when they can no longer pay their loan installments, mortgage loans are a secured form of financing and are well workable for the self-employed.
You can find interest rates for mortgage loans at us. How much interest you have to pay for your mortgage loan depends on the collateral value and your creditworthiness. If you want to take out a mortgage loan, you must prove your income. For you as a self-employed, these may include income tax assessments, a business analysis and a profit and loss account.
With a mortgage loan, you can negotiate a variable or a fixed interest rate for many years. The amount of the interest rate depends on whether you specify the fixed or variable interest rate. With a fixed interest rate, you can hedge favorable long-term interest rates, while with a variable interest rate you must expect high fluctuations during the term.
If you want to take out a mortgage loan, it is important to have the appropriate house bank. Unlike building loan financing, which is granted to workers, self-employed rates are often much lower. With a favorable creditworthiness, the creditworthiness is a significant interest rate.
The banks are particularly interested in earnings before taxes, which they deduct from this value and which should be used for retirement provision. The balance is used to check the creditworthiness.