CIS Mortgage - helping subcontractors get a loan
If you work in the construction industry as a subcontractor you’re in a privileged position when it comes to mortgages. A CIS mortgage can make it easier to get a high value loan than for many other Self-Employed people.
What is a CIS Mortgage?
Various mortgage lenders offer special mortgages for subcontractors who are part of the Construction Industry Scheme (CIS).
CIS mortgages aim to offer tailored mortgage deals to construction subcontractors. CIS workers can find they’re offered a higher loan value than with a standard mortgage.
With a Construction Industry Scheme mortgage, a lender bases your mortgage loan amount on your gross income – before tax and national insurance. This usually means better mortgage rates and a higher value loan.
This is great news if you work for yourself, as many Self-Employed people can find it challenging to find lenders and mortgage products that meet their needs exactly.
CIS mortgages recognise the fact that so many contractors and subcontractors in the construction industry have good, steady levels of income and successful businesses.
Who can get a CIS Mortgage?
If you run your own business and have signed up to the Construction Industry Scheme, you’re eligible to apply for CIS mortgages.
You will need to meet various criteria to qualify for a CIS Mortgage, though. Usually you need at least a 5% deposit, to have been Self-Employed for at least a year and worked in the UK for over three years.
How do I apply for a CIS Mortgage?
First you will need to identify a few CIS Mortgage lenders. These mortgages are available from a number of banks and building societies, so it’s helpful to shop around.
Comparing the products isn’t always easy – you need to look at fees, rates and criteria to narrow down the options. Or, get in touch with a One Mortgages and Protection expert mortgage adviser will seek out the most suitable options for you. We’ll also get you a Mortgage in Principle to help you make a credible offer on a home.
Applying for the mortgage is then a question of filling in some forms and supplying documents to prove your income.
You might need to provide your yearly accounts or an assessed tax return stating your annual income figure. Some lenders may ask for details of your current contracts and for recent CIS payslips – where they will base their calculations on the gross amount of income.
What are the Pros and Cons of a CIS Mortgage?
CIS Mortgages are well worth exploring if you’re a registered subcontractor, but there are a few disadvantages to be aware of.
Pros of a CIS Mortgage:
- You could borrow a higher mortgage amount
- You may gain good rates even if you have a bad credit score
Cons of a CIS Mortgage
- Not many lenders offer CIS mortgages so there are fewer options to compare
- Sometimes rates on a CIS mortgage are higher than with other lenders
To get the most competitive deal you will need to compare your options across CIS and standard mortgages. Check that the repayments on your mortgage are comfortably affordable, and look at fees and charges as well as monthly interest rates.
Can I get a CIS Mortgage if I have Bad Credit?
Every mortgage lender looks at credit scores as part of assessing you for a loan. But poor credit won’t necessarily affect your ability to get a CIS Mortgage.
If your business is doing well and your credit issues were a few years in the past, some mortgage companies will still offer you a competitive deal. Serious credit issues such as bankruptcy or unpaid CCJs could affect your eligibility, however.
How can a Mortgage Broker like One Mortgages and Protection help?
We’re here to take the stress and hard work out of finding a mortgage. Comparing deals is time consuming and complicated – and not all CIS mortgages are available direct to the public.
At One Mortgages and Protection, our mortgage advisors know the market inside out. We’ve helped many CIS members find a great mortgage deal and buy themselves a home. We will get to know you and your business, exploring all the details to help you achieve your property goals.
We are Appointed Representatives, registered in England and authorised and regulated by the Financial Conduct Authority. That means you can relax – let us provide detailed recommendations about the most suitable deals for your unique situation.
Your home may be repossessed if you do not keep up repayments on your mortgage
Why One Mortgages, Protection and Estates?
Call us now on 0113 208 3308
to find out more or arrange a consultation.
Based in Leeds, One Mortgages & Protection Limited offers impartial and unbiased advice to customers UK wide, no customer is too far away to help.