between a rock and a hard place, page-2

mrlunoon,

As soon as you say you are self-employed, it's history as far as bank loans are concerned. I have always had this problem. 10 or more years agao, I approached a bank for a loan, and finding out I am self-employed, all the rules changed. I was looking to invest in property at the time. Part of the test for lending is capacity to pay it back and they would not take into consideration any of my salary as bonafide income. In the end I had to go to a secondary lender at a much higher interest rate (and I am subsequently glad that I did).

In summary, I'm not sure the where's and why's but it seems that the major banks see less risk in lending to a low income earner than to a self-employed. Banks will still lend 90% to your average joe. 105%? That was always dodgy practise in my view and shouldn't be allowed.