ARE KITCHENER-WATERLOO SELF-EMPLOYED A GREATER CREDIT RISK?
There was a very good article in The Record. It was called “Self-employed May Do Better at Mortgage Broker” by Romina Maurino. You can read it here.
Mortgage lenders assume that self-employed borrowers are higher risk than salaried employees borrowers. That might not be the case.
The Annual Insolvency Rates for the Region of Waterloo looks like this:
|Consumer Insolvency||Business Insolvency||Consumer Bankruptcy||Business Bankruptcy||Consumer Proposal||Business Proposal|
The chart above shows the number of businesses per 1000 or the number of consumers per 1000. It shows that in the last decade businesses are doing better than personal consumers.
I acknowledge that the comparison is not exact. The consumers include the unemployed and self-employed consumers, not just the employed consumers. That being said, however, the recession of the last four years has made individuals realize how deeply they are in debt. It could very well be that individual consumers are in more financial trouble than businesses. Of greater interest, however, is that these statics are local. It is an open question whether institutionalized lenders (banks etc.) are aware of the local situation when setting its lending guidelines.