Building a house is still a big financial project that needs to be tackled. In addition to the equity of around 30 percent required for solid financing, you also have to find a bank that grants the client a loan. And this is where it becomes much more difficult for the self-employed and freelancers to get a high loan for this project from a bank.
The reason: Since the salary slip is sufficient for employees and civil servants as proof of income, the self-employed have to present their balance sheets as security, which means a greater administrative effort. In addition, self-employment is always a risk, so that banks often fear bankruptcy of the borrower during the construction of the house and thus classify loan repayments as at risk.
How do you find the right bank as a self-employed person?
You can go to the house bank and find out about possible building finance there, but often your own bank is not the cheapest provider because it only offers its own products.
Another option is to contact a competent direct financier, who will review all of the banks’ financing offers and who is also familiar with federal and local government funding programs.
The chances of getting a loan increase if the self employed
- has been self-employed for at least three years,
- if the income does not fluctuate much or even increases significantly from year to year,
- and when he presents balance sheets or the profit and loss account.
With fluctuating income as well as declining income, you usually have to expect a safety discount.
These rules make home financing more secure
The self-employed and freelancers, like all other future builders, should observe the following five rules for secure house financing.
# 1 Use equity
Without equity capital, home finance becomes too dangerous and too expensive. For solid construction finance, you should bring in at least 30 percent equity, the loan portion then makes up 70 percent.
This saves interest, because even in times of low interest rates, the bank still demands more interest on a mortgage loan than you get on your savings yourself. Bunkering savings and taking out an even higher loan instead brings nothing but high repayments.
# 2 Calculate the sideline costs correctly
The ancillary costs such as notary, land register entry, real estate transfer tax and broker remain with the building owner and must be added to the purchase price. The amount of these costs can make up to 16 percent of the purchase or construction sum.
# 3 Schedule a high repayment
The higher the repayment rate, the faster the loan is repaid and you save several thousand dollars in interest. A repayment rate of 2 percent is recommended by many experts.
# 4 Realistically assess your own work
If you want to do your own work such as wallpapering, painting, parquet and tile laying, you should realistically assess the cost savings. Some set this too high, so that as a result, additional funding is required.
# 5 Prefer annuity loans
With an annuity loan, a fixed loan amount is repaid month after month until the loan expires or the debt is repaid. Other financing options do not bring much or can even be dangerous the foreign currency loan. If the value of the foreign currency changes to the dollar, the financing becomes an incalculable risk.
Carry out a mortgage comparison online
If you are planning to build a house, you can carry out a home finance comparison online beforehand. So you can find a building finance calculator that calculates a financing offer in just a few steps.
The consultants accompany their customers on their way to the desired property, develop financing offers and optimal financing strategies for building finance.
The consultants have been tested and approved by the chambers of industry and commerce. Since they are not tied to any credit institution, they can tailor the contracts to customer needs.
On the online portal you will find, in addition to loan calculators, mortgage lending and other calculators, more than 400 providers of mortgage lending services, whose services can be compared. In this way, those interested in real estate can find the right loan for them quite easily.
It is much more difficult for the self-employed to get their own property, whether through buying or building it themselves, but also not impossible.
It is important for the credit institution to be financed whether the self-employed has been generating his income for a long time, whether this income is stable and whether the self-employed can finance the property. You may have to expect risk premiums.
As far as the funding programs are concerned, they are also available to entrepreneurs.