For many people, the desire to move to a warmer country is high. This is particularly true for freelancers who can work from the comfort of their own laptops. Some of these freelancers even earn a significant amount of money, often six figures and more. They, therefore, become optimistic when they look up how much they can loan with a mortgage calculator.
However, many banks are still refusing to approve their loan applications, because even though these freelancers might earn a lot, their income is often variable, and provide a risk factor for the banks.
This is especially widespread among Norwegian freelancers who want to move to Spain and purchase a home there, given the high GDP in Norway. Nonetheless, while the mortgage calculator (Norway and Spain) may show that they will easily be able to repay the mortgage, the banks are still refusing to provide them with the loan they need.
The Problem with Variable Income
One of the biggest problems with having a variable income is that it makes it difficult for banks to assess your ability to repay a loan. In many cases, banks will simply refuse to approve a loan for a freelancer because they don’t know how much they will earn next month, as this poses a risk that the bank won’t get its money back.
The reason for this is that history has shown that a full-time employee is more likely to have the same job in the next 5 years than someone who does independent projects online. This is a serious problem for freelancers because they often have to resort to specialty banks that have lower requirements but higher interest rates.
The Solution?
There is no easy solution to this problem. However, one possible way out is for freelancers to get creative with their income sources. For example, they could look into getting a part-time job or starting a side business in addition to freelancing. This would give them a more consistent income and make it easier for banks to assess their ability to repay a loan.
Another option is for freelancers to save up enough money so that they can make a large down payment on a home. This would reduce the amount of money they need to borrow and make their loan application more likely to be approved.
Statistics About How Much of the Workforce Freelancers Make Up
Statistics show that a large portion of the workforce in different countries is made up of people who are not employed by traditional means. This is likely due to the rise of technology and the internet, which has made it easier for people to work remotely. For instance:
- In the US, freelancers make up 35% of the workforce
- In the UK, they make up 15%
- In Spain, they make up 10.2%
As you can see, the number of freelancers is growing rapidly all over the world, but banks have yet to adapt to this change and are forced to disappoint optimistic freelancers who want to move to warmer countries.