Thursday, 7 May 2009

Self Employed? Wait 2 years before you get a mortgage!

It's a HOT topic!

(Please take a few of these comments with a pinch of salt, I have been slightly sarcastic with certain comments)

Something that I've been wanting to let out for a long time!

When governments /banks & countries are in a recession, what is it they always ask of their citizens?

What is the biggest financial sector at the moment, that governments are trying to punt?


Self Employed Individuals.
The banks and governments are pumping millions and millions of rands into "small business start ups"!
Why? Well, small business start ups bring "entrepreneurship" and ideas to a stagnant and declining economy. It's a sure way to make sure that the countries, youth and ideas don't fall along the wayside and it's a good way to keep stimulating the economy especially when big giants start collapsing (

So where the hell am I going with this, you may be asking yourself?

Well I just so happen to by the Entrepreneur magazine every month, it happens to be the best business magazine I've ever read locally and abroad, and there's talk of billions and billions of rands available in small to medium business start up funding! GREAT! I LOVE IT! Means more money gets put into the economy and the fact that alot of this funding is coming from the banks is even better, they know what they're talking about.

Here's what pisses me off!

If you're an ABSA home loan clients don't even think of applying for a home loan unless your company has been running for 3 years!

If you're an FNB / Nedbank or Std client don't even think of applying for a home loan unless your company has been running for 2 years!

BETTER YET, Nedbank and Std bank won't accept self employed people unless you bank with them.

What I love most!!!!!! If you earn cash, even if you declare 100% of your cash and deposit 100% of your cash into your account and pay taxes on it, they still won't give you a bond!

This means that unless your company has been running for a full 2 years & you meet the following requirements, YOUR MORTGAGE APPLICATION will be declined:

1. 2 full years of audited financials (These must matchup 100% with your business bank account transactions)
2. 12 months bank statements for your personal account
3. 6 months bank statements for your business account
4. A letter of income that states what you earn every month (MUST REFLECT IN YOUR PERSONAL BANK ACCOUNT AS A SALARY)
5. IT34 that must prove the amount of tax you pay every year


So here's the summary of what Self Employed individuals can and can't do!
- Never ever run a cash business (pilates, gyms, private tutoring, schooling etc etc), the banks want to make money of every transaction you do, heaven for bid you should save R5.
- Make sure everything you earn is declared (or not visible)
- Make sure you pay accounts to do your financials and books (even if you're not making that much money)
- Pay your TAXES!!!!!!!!!!!!!!


Absa home loans, Nedbank home loans, FNB home loans and Std Bank home loans!

This letter is to you!!!!

1 comment:

Character Education said...

Thanks for such a detailed information about home loans. This is what i was looking for. Any other company you would suggest for home loans.