CIS Mortgages

What is a CIS Mortgage? 

As a contractor you may find it slightly more difficult when looking for a mortgage as many high street lenders want to see at least two years worth of accounts to access a mortgage. A Construction Industry Scheme  – CIS Mortgage is a mortgage that allows the amount you borrow to be based upon your day rate.

This is advantageous as usually lenders will base calculations upon a day rate rather than an estimated annual income. It allows the construction industry workers to be able to borrow more on their mortgages than they would usually be able to access through a high street lender.

Who is eligible for a CIS Mortgage?

You need to ensure that you are registered with the CIS industry in order to qualify for a CIS Mortgage. You need to be less than twelve months self-employed with a 5% deposit ready to go. You will need to be on a high day rate but with a low net profit. You need to have worked less than three years in the UK too in order to qualify. 

CIS Mortgages are even an option for those with bad credit too just as long as you haven’t had a CCJ or default within the past two years. Many lenders will offer you great mortgage rates even with your bad credit due to the mortgage being based upon your day rate. 

How to apply for a CIS Mortgage?

You need to try and get as much of a deposit together as you can, the bigger the deposit you can offer the better. Even though the CIS Mortgage is accessible with only a 5% deposit if you approach a lender with more than this you are likely to be offered more exclusive interest rates and mortgage rates.

You need to make sure that you have all of your contracts and upcoming contracts ready for the lender to examine. As the calculation for the CIS Mortgage is determined upon your day rate not an annual income figure, you will need to provide evidence of how much this is. As a CIS worker you need to gather all your CIS payslips too as well as proof of paid tax and national insurance. 

Try to avoid long breaks in between contracts as lenders will see this as a red flag in terms of borrowing. You need to show that you have a regular income and can handle your finances. Lenders will not concentrate so much on your credit history unless it is something more serious such as a CCJ or a default.

You should approach experts when it comes to a mortgage as not only will it save you time – but it can also end up saving you money too. It will be worth approaching an accountant to help get your paperwork and taxes in order. Lenders will want to see that you have paid the correct t taxes and some even look into what accountant you use.

How do you get a CIS Mortgage with bad credit?

Lenders will tend to look into your day rate rather than your credit so as long as you do not have a CCJ or a default then you shouldn’t have a problem with getting access to a CIS Mortgage.

What are the Pros and Cons of a CIS Mortgage?

There are positives and negatives to getting any kind of mortgage.

Positives

You can be approved for larger mortgage amounts

You can access better rates despite bad credit score

Understanding of a contractor employed people

Tax benefits – *HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen*

Negatives

CIS Mortgage lenders are hard to find

Sometimes other lenders offering different specialised mortgages can offer better rates

How can Mortgages by McAteer help me?

We are experts in all things Mortgage here at McAteer and have a team of eager mortgage brokers waiting to help find the right mortgage for you. We will listen to your circumstances before hand picking lenders that are the right fit for you.

Mortgages By McAteer is an appointed representative of The Openwork Partnership, a trading style of Openwork Limited. We have access to over 70 mortgage lenders meaning we can access exclusive mortgage deals that might not appear through lenders at banks and building societies. 

Get in touch with an expert at Mortgages by McAteer today for expert guidance on your mortgage application today.