Entrepreneurs Face Stricter Scrutiny for Mortgage Loans

Entrepreneurs in Finland often find it more challenging to secure mortgage loans compared to salaried employees, with banks requiring extensive documentation to prove financial stability.

Timo Heiskanen, a construction and real estate consulting entrepreneur, successfully obtained a mortgage on his third attempt. The process took nearly two months, despite his stable business income and significant savings. Heiskanen provided financial statements, cash flow forecasts, and contracts to demonstrate his creditworthiness.

Juhana Brotherus, CEO of the Finnish Work Association, acknowledges that entrepreneurs face stricter scrutiny. He attributes this to banking regulations that favor salaried income over entrepreneurial earnings, which are seen as less predictable. Some banks also adopt overly stringent interpretations of these regulations.

When approached by Yle, six major Finnish banks confirmed that the criteria for mortgage approval are the same for both entrepreneurs and salaried employees. However, they acknowledged that the process may require more information on a case-by-case basis, making it more cumbersome for entrepreneurs.

Source: Yle