Financing as a self-employed person

Basically, you need equity for the auction. It doesn't work without that. Only without approval it will be difficult. What do you do if you win the house at auction but then don't get financing? The combo of auction & self-employment is somehow the killer

That was the statement from the "house bank" (where the equity is). I just found that very strange and unprofessional. I will contact the financial advisor (not this "house bank") soon to ensure the offers/requests are secure. I do have equity .... the 10% security deposit is also not a problem. I will, of course, only bid once I have the approval.

That was the one statement from the "house bank" (where the equity is). I just found that very strange and unprofessional. I will contact the financial advisor (not this "house bank") soon to ensure that the offers/requests are in safe hands.

Well, calculating a financing means working time. And whether you get the contract and then need the financing is another matter. Somehow a pretty stupid construct - all in all.

Google for [Notfallkoffer IHK]. The bank often asks what happens if you suddenly become unavailable today due to illness or accident. There is no social safety net for you. This emergency kit is a pretty good guide. Nicely structured and helpful. It also saves a lot of talking. If asked how you have secured it, just lay down the folder.

Well, calculating a financing basically means working time. And whether you get the contract and then need the financing is another matter. Somehow a pretty stupid setup – all in all.

Calculating the financing is the smallest part, just a push of a button.

What becomes complicated is the review of the entire documents regarding self-employment and income. Both the sales department and the subsequent department would have to give their approval. Above all, this beautification of the self-employed income can become a problem!

I don’t know how reliable the information here was, but personally I read that with 60 hours/week a gross of €3,900/month is achieved. That is just under €15 per hour! Also the €2,600 net with 250 working days without vacation… ouch. Recalculated to a 9-to-5 employee that would be a monthly wage of maybe €1,600 per month (hour-wise) whereby that employee is still socially well covered.

By now I see the project with those numbers extremely critically.

The examination of the entire documents regarding self-employment and income becomes complicated. Both the sales department and the downstream office would have to give their approval. Above all, this beautification of the self-employed's figures can become a problem!

That's what I mean. That's why the visit to the tax advisor should be done beforehand. The press of a button at the bank is simply not enough for this special construct. After all, he needs facts when he auctions off the item.

This is how it looks, 99.9% of banks do not make a final offer if they do not have a written award from the district court.

Of course, you can roughly estimate the award for what you can auction it for, then there is also an "offer" which is roughly estimated and of course non-binding.

For a self-employed person, banks also deduct many expenses that you currently do not have! You say that hardly anything is done for retirement provision? That's why you have 1,700 EUR available monthly.

However, the bank will deduct 20% from the gross in the "background" calculation, so from the 3,900 EUR (like for employees, the employer's and employee's share to statutory pension), so on paper that is already 780 EUR gone...
then from the 1,700 EUR net only about 1,000 EUR remain, and with that no bank would be able to provide financing...
even if the bank only deducts 400-500 EUR for retirement provision here, then we are at 1,200-1,300 EUR, still far too little to finance 200,000 EUR...

PS. So if an employee earns 40,000 EUR gross per year, a self-employed person has to earn at least 50,000 EUR gross to have the same net!
Because for the employee, the employer still pays about 20% in social contributions for them (pension, health insurance, unemployment insurance, etc.)
As a self-employed person, you have to bear all that stuff alone.