Banks are at the latest since the entry into force of the sog. Residential real estate loan guideline on 21.03.2016 obliged to check your income very carefully when granting a loan. As a freelancer or tradesman, you must therefore provide a whole range of proof of income when applying for real estate financing. We show you what documents you need to succeed with the banks.
Basis for the credit decision of the banks are usually your numbers of the last 3 full calendar years (with some few banks also the numbers of the last 2 Jahre are sufficient). If you have less than 3 (resp. 2) full Kalnderjahre are self-employed, it will be tight. Most banks will then refuse a Finnazierung, because from their point of view your income is not really sustainable.
Let's assume that you want to apply for appropriate credits in the middle of the year. Then you need the following documents for the banks:
- the last available tax assessment incl. the corresponding tax return (incl. Attachments)
- the balance sheets or profit statements for the last 3 full calendar years (incl. Sum and balance lists!)
- a current BWA for the current fiscal year
If your profits reflect a positive trend over the years, all is well. If there are fluctuations or if the trend is even negative, you need a good rationale for how your sales and profit numbers are trending. There it is helpful, if you and your tax advisor(in) this development briefly explain.
Tax assessment: the devil is in the details!
The last tax assessment should be from the year before last at the latest (example: loan application in mid-2021, then you should at least have the tax assessment for 2019). If the last tax assessment is older (for example, for the year 2018) you need a good justification from your tax advisor.
Please also keep in mind that banks pay very close attention to whether there is a threat of additional tax payments. This is usually the case if your profits have increased since you filed your last tax return.
And that is not the end of it!
In addition to the information on the profit you make with your trade resp. of your freelance work, banks require further documentation:
- Proof of existing health insurance and its costs
- Proof of a current retirement plan (if proof is not provided, banks apply matching lump sum contributions)
- Proof of advance tax payments
Proof of income: Almost nothing works without a tax advisor!
In order to save costs, many freelancers and tradesmen who are not required to prepare accounts do without a tax advisor. As long as there are no special tax issues, this can be fine. However, as soon as a real estate financing is pending, this is often no longer enough. Banks want to make sure that there are no nasty surprises. Quite a few self-employed persons file their self-prepared tax returns for years and never have any problems with the tax office. until then the first audit by the responsible tax office takes place.
Our tip
If you want to finance a property, you should ask your tax advisor(s) to compile the relevant documents for you. This (r) usually knows what is important to the banks and can, if necessary. etsprechende explanations to your figures provide. If you do not have a tax advisor, you should look for one now at the latest, because with "self-made" documents, you will not get far with many banks.
As part of our consulting and brokerage activities, we check your documents and evidence. If questions should arise, which every bank asks, we clarify that with your and/or. Your tax advisor. This saves you time, nerves and -above all- rejections by potential lenders.