Home finance for self-employed


A banker is a guy who lends you an umbrella when the weather is nice and demands it back as soon as it rains.” There is hardly a group of people who agree with this statement on lending, even mortgage lending, as self-employed people do. 

The crux with the income

The crux with the income

The lending to the self-employed represents a potential risk for banks. The salary assignment is the easiest means of securing credit, even with mortgage lending, this accounts for freelancers and traders.

Economic risks and sector-specific uncertainties hover over a self-employed person like a sword of Damocles in a mortgage lending request.

The credit check is far more extensive due to the analysis of balance sheets, profit and loss statements and tax assessments. This makes it more costly for the bank on the personal side and reduces the margin.

Although the industry plays a role in employee credit checks, this is even more the case for a self-employed person. The employee may have to go into short-time work in a weak economy, in the worst case, the termination. In the case of a self-employed person, however, a possible economic downturn will be fully effective immediately and endanger the repayment of the loan.

Equity as the linchpin

Equity as the linchpin

A bank is an institution from which you can borrow money – provided you can prove that you do not need it.

From this sentence a simple fact can be derived. For example, while civil servants do not necessarily focus on equity, the self-employed are the better.

An 80-percent financing is generally considered solid, in a self-employed rather than risky. The less a self-employed person needs as a mortgage lender, the greater the chances that he will receive it.

For the self-employed it is important to show and use as much own funds as possible. One way to do this, for example, is a policy loan on an existing life or pension insurance.

Since this is an advance payment of even saved money, this loan option is not considered a loan in the legal sense. The policy loan is possible up to the amount of the surrender value.

Alternatives to real equity

Alternatives to real equity

Even if it is often difficult to reconcile with self-employment, in-house services or redevelopment offer a way of improving the equity ratio in accounting terms.

Relative loans, of course, are the simplest way to optimize your own funds for the bank. The request for a contribution from the local community may improve the standing. A burden bonus is the equivalent of the housing allowance. 

As before, no credit is the best loan. This statement has just for self-employed. The loan agreement should therefore provide for the possibility of free special repayments in order to repay the loan as soon as possible.

It is quite possible that the bank would spontaneously want to see the balance sheets in future years. A decline in sales, even if it does not affect the monthly installments, could lead to the loan being terminated.

In addition, the same applies to the self-employed as to all other financiers: the loan should be paid off upon retirement.

Request a free quotation for individual mortgage lending

Request a free quotation for individual mortgage lending

As every home loan should be tailored to your needs, we recommend that you consult an expert when planning the financing. Using the form below, you can request a free and non-binding financing consultation and a corresponding offer from Interhyp AG, one of the leading mortgage loan intermediaries in Germany:

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