As a construction subcontractor you might worry about getting a good mortgage. Fortunately, a CIS Mortgage is designed to help you get a fair deal.
This situation is improving, however, and particularly so if you work in the construction industry.
There are many contractors and subcontractors working in this sector who generally have good levels of income and successful businesses.
As a result, various mortgage lenders now offer special mortgages for subcontractors that are registered with the Construction Industry Scheme (CIS).
A Construction Industry Scheme mortgage allows you to base your mortgage on your gross income – before tax and national insurance. This usually means better mortgage rates and a higher value loan.
Lenders will be looking for you to meet a few criteria, however. You will usually need at least a 5% deposit, have been Self-Employed for at least a year, and have worked in the UK for over three years.
The next step is to show your chosen lender proof of income. How you do this will depend on each bank and how they approach CIS mortgages.
If they consider you to as Self-Employed, you might need to provide your yearly accounts or an assessed tax return stating an income figure. Some lenders will see you as a contractor, and ask for details of your current contracts. You will probably need to show recent CIS payslips.
CIS mortgages aim to offer construction subcontractors unique and positive mortgage deals. CIS workers could find that they are offered a higher loan value than with a standard mortgage, or that their annual income is based on pre-tax earnings.
Pros of a CIS Mortgage:
Cons of a CIS Mortgage
As with any financial product, it’s important to compare your options carefully. Make sure you can easily afford the repayments on your mortgage, and always consider the fees and charges as well as the monthly interest rates.
So if your business is performing well and your credit issues happened a few years ago, some mortgage companies will continue to offer you a competitive deal. More serious credit issues such as bankruptcy or unpaid CCJs could limit your chances, however.
How can a Mortgage Broker like Momentum Mortgages help?
Comparing mortgages is time consuming and can be complex. Plus, not all CIS mortgage lenders advertise directly to the public – some are only accessible via brokers.
At Momentum Mortgages, our mortgage advisers are specialist mortgage experts. We have helped many CIS members find competitive mortgages and buy themselves a home.
We are Appointed Representatives, registered in England and authorised and regulated by the Financial Conduct Authority. That means you can relax and let us provide detailed recommendations about the most competitive deals.
Our advisers will get to know you and your business, exploring all aspects of the deals on offer to help you achieve your property goals.