Self-employed people often have a harder time than employees when it comes to real estate financing. Banks assess the income situation of entrepreneurs, freelancers or tradespeople more strictly, as income can fluctuate. With good preparation, however, it is still possible to obtain a loan successfully.
What documents do banks require?
Self-employed persons usually have to submit more comprehensive proof than employees. This includes
Balance sheets or income statements for the last three years
Current business analyses (BWA)
Tax assessment notices and proof of income
Order books or references, if applicable
What banks pay particular attention to
Stability and continuity of income are crucial. The longer you have been self-employed and the more constant your income, the better your chances of obtaining financing. Equity is even more important for the self-employed - at least 20 to 30 percent should be available in order to obtain favorable conditions.
Conclusion
Self-employed people must expect stricter checks when it comes to real estate financing. If you prepare all documents in good time and have sufficient equity, you will significantly improve your chances of a successful loan application.
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