Halifax CIS Mortgage – What you need to know
What Is A CIS Mortgage For Contractors?
Most construction workers are self-employed, so proving your income for a mortgage application can be slightly more complicated. Self-employed mortgages are tough enough to negotiate, but with the Construction Industry Scheme mortgages, construction workers have a pathway to obtaining a mortgage.
They’re an excellent option for construction industry workers who do not have three years of accounts or if they have a low net profit. The reason that the CIS mortgages stand out so well for them is that lenders allow the construction workers to declare the gross income on payslips instead of using filed accounts.
What Is the Construction Industry Scheme
Introduced by HMRC, the Construction Industry Scheme was aimed towards allowing contractors to take money from a subcontractor’s payment and pay it directly to HMRC instead. These would then be looked at as advanced payments towards their tax and National Insurance, and all contractors have to register for the scheme. Subcontractors have the option to not register for this scheme, but if they don’t, payments are deducted at a higher rate.
These mortgages are so useful for any construction applicants, as self-employed mortgages are subjected to lengthy scrutiny. Lenders work to assess how much someone can afford based on their net profit figures and with self-employed mortgages, the offered mortgage amount is often lower. With CIS mortgages, lenders can calculate the affordability of the construction worker on their gross income instead of net income. Over time, this will then maximise the value of the offered mortgage rate.
How Do I Qualify For A Halifax CIS Mortgage?
Halifax has long set the tone for contractor mortgages as we know them. And they are still the immovable leaders of the CIS mortgage market. The very first bank to use daily rates, Halifax has been the preferred option for those looking at how much they could borrow. Mortgages for contractors are not easy to find, but Halifax challenged this. They began by offering their mortgages only to IT contractors, with non-IT contractors required to provide a year of accounts at the very minimum. It’s on this basis that Halifax assessed affordability. In 2013, this changed, with Halifax widening their scope beyond IT contractors to reach niche sectors within the self employed mortgage market. The lending policy from Halifax is favourable due to the fact that their approach is one of the most flexible out there today!
Halifax will accept applicants for the with the caveat that the contractor has to work in the same line of work for two years and this must be uninterrupted. This safeguards both Halifax and the contractor, as there is more security for the bank and confidence for the contractor that they can comfortably meet the terms of the mortgage.
Halifax is also quick with their mortgage processing policies. It’s so crucial that borrowers can secure an offer from their lender quickly to feel confident in their ability to pay and obtain the mortgage. With the backing of a lender like Halifax, a CIS mortgage is obtainable, and it allows the borrower that relief.
There shouldn’t be any more than six weeks between jobs. Gross annual income is calculated as total gross income received over a three month period, this is then averaged and then annualised. This gives borrowers a chance to see whether they would be successful before they apply. When choosing Halifax for your CIS mortgage application, you should bear in mind all of the lending criteria before you go ahead and apply so that you won’t be rejected straight away.
Contractors choosing a Halifax CIS mortgage will notice the difference between Halifax and other mortgage options based on the lending criteria. Contractors get extra security and fewer barriers to a mortgage with a Halifax CIS mortgage.
At CIS Mortgage Advice we specialise in this area and want to retrun the hard work and dedicattion that you put into your line of work. It is our goal to help find the right mortgage option for you.
We review your circumstances as an individual and provide expert tailored advice.
Our dedication and qualifications in this market will ensure that the mortgage and financial advice you are given is to your own requirements and no one else.