Need help getting a Construction Industry Scheme mortgage?
Our advisers are specialists in helping contractors around the UK in finding the best mortgage deals to suit their self-employed status.
If you are paid via the Construction Industry Scheme (CIS), are self-employed, and have been under contract with one company for a least half a year, then our advisers can help you.
Even if the firm you work for doesn’t fall into the construction sector, providing you can provide proof of work, our advisers can help you assess your eligibility before finding you a great deal.
Are you struggling to find a mortgage lender?
Unfortunately, the big-name lenders aren’t always that flexible when it comes to self-employed CIS mortgages.
You might have given them everything they asked for, including mounds of paperwork, and it’s still not good enough for them.
Our advisers are different and understand that your actual earnings might not be truly reflected in the accounts that you have supplied to a high street lender.
By contacting our team, we will match you with an adviser who has an in-depth understanding of how self-employed contractors work.
Your adviser will then be able to calculate how much you can borrow, how your application should be structured, and then submit that to one of their specialist CIS mortgage lenders.
Who are the best CIS mortgage lenders?
There’s no definitive list, only because every self-employed contractor our advisers help will be in a different situation.
What our advisers will do is search the whole of the mortgage market independently in order to find the right lender willing to accept your application based on the way in which your income will be assessed.
What contractors can apply?
You don’t necessarily have to work in the construction industry. Contractors work in a wide range of roles, and our advisers help self-employed people every day in getting the right deal for them.
The types of contractors can include, but is not limited to:
- Agency workers
- Construction contractors
- Design consultants
- Engineering contractors
- Heating engineers
- IT contractors
What is a CIS mortgage?
Firstly, lets understand what the scheme means.
The Construction Industry Scheme was launched by the HMRC to let registered contractors deduct money from payments to a sub-contractor, to then be paid as tax. These deductions are tallied up as advance payments towards the sub-contractor’s NI contributions and overall tax.
As a contractor, you will need to be registered to the CIS, but sub-contractors don’t have to. If not registered, deductions will be taken from payslips, but at a higher rate of tax.
In simple terms, it means you are making advance payments towards the total income tax and National Insurance that will be paid once accounts are filed.
So how does this affect a mortgage application?
CIS mortgages can make things easier, because you can apply even when you don’t have three years’ worth of accounts or have low net profits. CIS self-employed mortgages let you use gross income rather than your actual accounts.
In simple terms, with the right advice and support, you could maximise the mortgage amounts offered as the lender will calculate affordability on gross income, not net.
How do I qualify for a CIS mortgage?
As you might have already experienced, not all lenders will offer Construction Industry Scheme mortgages.
You will have to apply to a specialist CIS mortgage company, providing you can answer yes to the following statements:
- Does your firm deduct 20% of your salary as part of the CIS scheme?
- Do you have 3 to 6 months’ worth of payslips?
- Do you have 3 to 6 months’ worth of bank statements?
Based on that criteria, one of our advisers will be able to help you find the right mortgage that your actual income deems you can afford.
What if I have bad credit or a small deposit?
Having bad credit doesn’t mean you can’t get a mortgage.
However, there are different levels of bad credit, but your adviser will need you to be completely honest and open about all defaults and historical issues.
That can be as simple as requesting a credit report from one of the online services such as Experian or Equifax, which you should then pass to your adviser.
Not all bad credit is treated the same, for example an unpaid phone bill isn’t as serious as a mortgage default, so every case will be different.
Having good credit history is important, but it doesn’t mean you won’t be able to get a mortgage, particularly if the issues were registered over 2 years ago.
By working closely with your adviser, supplying as much information as you can, they can still look to find you a mortgage deal, even with bad or poor credit ratings.
And with a deposit, our advisers work on making deals happen from amounts as low as 5% of the purchase price.
How much deposit will I need?
Our advisers have secured mortgages for self-employed CIS contractors with as little as 5%. But if you do have a larger deposit available you will certainly have more options available to you in terms of lenders and rates.
If you can, try to hit at least the 10% number with your deposit as our advisers can then get your better rates and choose from a wider range of mortgage companies.
How much can I borrow?
All CIS mortgage companies have different approaches to affordability and risk, and how much you can borrow will vary from lender to lender.
In most cases the lender will look at your gross pay before the 20% CIS deduction over an annual projection to calculate how much you will potentially earn over 12 months.
Many of them will let you borrow up to 5x this amount on a mortgage.
In a real-life scenario if you earn £700 a week before tax for 5 days’ work, the lender will multiply that by 48 weeks giving you a projected £33,600 annual salary.
That annual salary is then multiplied by 5 to give a borrowing amount £168,000.
But, any mortgage offer you receive will also be calculated on affordability including aspects such as existing financial commitments such as loans, card, and finance agreements.
Are you self-employed with less than 1 year’s accounts?
This is one of the most common issues that contractors face, but it doesn’t mean you can’t get a suitable mortgage.
Even if you have just started a new contract, there’s no reason why you can’t start planning for your first steps onto the property ladder with the support of our advisers.
They have a specialist knowledge of the CIS Scheme, and can help you present a very strong application to the best lenders. They don’t just find you a mortgage, but also make sure you get a deal with the best rates or loan amount possible.
What to do next…
Whether you want to buy now or are simply looking to the future and exploring your options, our advisers can help with CIS self-employed mortgages.
To take advantage of these years of experience, an in-depth understanding of the market, and exceptional results, call us today or complete any enquiry form.