Find The Right CIS Mortgage
If you’re a Construction Industry Scheme (CIS) subcontractor, you may find it a struggle to find the best mortgage for your individual needs and circumstances. This is because as a contractor, your income may not be as steady as someone who is employed full time. But don’t lose hope, as we specialise in providing mortgage advice for subcontractors paid via the Construction Industry Scheme to ensure that contractors do not get a raw deal and get the right mortgage for their needs.
How can we help
Instead of making the process of getting a mortgage for subcontractors gruelling, we aim to take away the stress and hassle from it. To reduce your tax liability, your bookkeeper or accountant will usually advise you to record all your business-related expenses. However, this poses a problem when it comes to seeking a mortgage as banks use your net profit after expenses to calculate how much you can borrow. This typically yields a much lower borrowing figure in comparison to what is offered to someone employed full time.
The reason why banks treat you like this is that they do not fully understand your status – but luckily, we do.
At CIS Mortgage Advice, our specialists’ mortgage advisors calculate how much you can borrow based on your daily rate of pay, rather than the profit you show the taxman after your expenses. We can also achieve a better level of borrowing, by placing your mortgage with a lender that is familiar with the CIS Scheme.
All you need to do is give us five minutes of your time and we can show you how.
If you’re wondering whether you qualify for a CIS mortgage or not, ask yourself these simple questions:
- Are you a self-employed builder, decorator, electrician, heating engineer, or other role working in the construction industry?
- Do you work for a construction firm that deducts 20% of your salary for tax?
If you answered yes to these two questions, then you are paid through the Construction Industry Scheme (CIS) – and we can help you get a mortgage.
For our clients, the following circumstances are normal:
- Less than 1 year self-employed
- 5% deposit
- Less than 3 years in the UK
- High day-rate but low net profit
As long as you are on the CIS Scheme and have 3 months’ worth of continuous payments and a good credit record, then we can help you get a mortgage based on your average day-rate.
Don’t worry if you’ve even had a few minor credit blips in the past; or have yet to complete your first self-assessed tax return: we can still help.
A CIS worker is the middle ground between being truly self-employed or permanently employed. However, most mortgage lenders treat CIS subcontractors as self-employed, and before considering a mortgage application they will ask to see accounts for at least 2 and perhaps even 3 years. But what if you’ve been contracting less than a year?
If you’ve only recently become a CIS subcontractor, most high street banks or mortgage brokers would penalise you for it. They struggle to find a mortgage suitable for someone who has a continuous record as a CIS subcontractor running for less than 12 months.
But, we are different. We are on your side and we understand that you might have changed profession, or maybe a previous employer offered you better terms or enhanced salary if you’d switched to becoming a contractor – these things happen. Where others may have failed you, we are confident we can find a suitable mortgage after you complete our fee free, no-obligation telephone assessment.
So if you’ve only been a subcontractor, or self-employed, for less than a year, our mortgage advisers can even help you get a mortgage without having to complete 2 or 3 years of accounts.
The simple answer is that different lenders apply different calculations.
Typically, it is the average of the gross amount you were paid over the last 3 – 6 months (before the CIS 20% deductions).
This figure is then annualised, to give the lender an indication of the amount you would expect to earn over the course of a year.
You are able to borrow around 5 times this figure on a mortgage, on average.
It’s possible to get a mortgage with a deposit as low as 5% with incentives like the Help to Buy scheme, however, as with most mortgages, the higher the deposit, the better rate you’re likely to achieve. A lender probably prefers you to have a deposit between 10% and 20%.
Even if you have managed to save just 5% of your expected purchase price, have a small CCJ or a default registered more than two years ago, we can still help you get a mortgage.
Our mortgage advisers will ask you a detailed set of questions about your circumstances and if there is less than perfect credit record you must be prepared to explain the situation around each negative point – this will help our advisors build a case to support your application for a mortgage.
But they must know all the facts about you and your credit situation, because only then can they mount a successful challenge for a mortgage, based on your day-rate. So, if you have any bad credit, no matter how minor, obtain a copy of your credit report and present it to your mortgage advisor.
Whether you ready to buy now, are just planning ahead in order to buy a new home in the future, call us; or send an enquiry and have one of our experienced CIS mortgage advisers call you right back.
We Say Yes To CIS
Example: Mortgage Approved For CIS Subcontractors
Brothers Daniel and Michael are CIS Subcontractor painters from Hull.
They drove all the way to me in Essex this to arrange a mortgage each from their Gross CIS Income.
They'd already spoken to other brokers that said it would be impossible from their current self-employed income.
I worked off gross payslip income over the last 12 months and by lunchtime, the mortgage had been approved on the phone subject to survey.