Banks wary of bonding self-employed people
http://www.iolproperty.co.za/roller/news/entry/banks_wary_of_bonding_self
Banks wary of bonding self-employed people
A growing number of people who are self employed, with incomes dependant on fluctuating commissions, face huge difficulties in becoming homeowners, says Lanice Steward, MD of the Cape Peninsula estate agency, Anne Porter Knight Frank.
This, she says, is because the banks, complying with the National Credit Act, have to be especially careful about lending money to people who are employed in positions which might be considered insecure.
“There is,” said Steward, “a certain arbitrariness about the concept that a self-employed person, especially one on short term contracts, is not a good security risk because many of these people are high income earners – but that is the way the banks feel obliged to act.”