What is CIS Mortgage?
The truth is, there is no actual product that is called CIS mortgages’ but there is what is called the Construction Industry Scheme.
The CIS permits a lone trader to have his income examined and verified by a mortgage lender. Over a period of time, this process was called the CIS mortgage. Anyone who had registered for the Construction Industry Scheme is given the opportunity to get a mortgage.
Although, applying for CIS mortgages can be quite challenging to those who are self-employed. The income they typically present may not be consistent with the profit they actually get from their business. This can be problematic when it comes to paying their income tax. Self-employed individuals may declare a different income, which may significantly decrease the income tax they need to pay. In turn, this can also have a notable effect on the approval of a mortgage provider.
The good thing is the Constructions Industry Scheme (CIS) is giving individuals in the construction industry a way to present their income through pre-tax gross income.
Who can avail of the CIS mortgage?
Anyone who is self-employed in the field of construction can get a CIS mortgage. Other than those who are part of the actual construction of the building, even architects and interior designers are offered CIS mortgages.
With the help of the Constructions Industry Scheme, a contracting body can serve as the manager of workers who are subcontracted. Lenders who are responsible for providing mortgages can easily evaluate your gross profit as you income, instead of you doing self-assessment that came from the HMRC.
How can you apply for a CIS mortgage?
When you consider applying for a CIS mortgage, you will be need to organise a lot of paperwork as proof of your income. You will be needing a minimum of 12 months of accounting history in the form of your bank statements and payslips from CIS. If you are not knowledgeable about the many considerations that come with applying for a mortgage, it can be challenging.
To make things much easier, you can get a mortgage advisor through a platform such as Mortgage Experts Online. Speaking to one of their mortgage advisors would help to save you a lot of time compiling all the papers you will need. What’s more, they can provide you with better access to some lenders to give you better deals. If you hire and work with a competent mortgage advisor, you might be able to find the loan you’ve been dreaming of.
What are the advantages of CIS in getting a mortgage?
When you sign up for a CIS, you get a better mortgage ceiling. This means that you get a higher buying power with mortgage lenders. You can buy make a purchase as much as five times your annual income. Plus, you get better deals.
If you can provide a higher income level, you can get a mortgage rate that will align with your needs. When you get a better deal, you wouldn’t even need to use the buying power afforded by CIS.