Commercial Investment Mortgages Using CIS Scheme
The Construction Industry Scheme (CIS) Mortgages are ideal for applicants in the construction sector looking for commercial investment mortgages. But despite the advantages, you must know how to apply for a competitive mortgage. An example of these challenges is provided here:
1. Business investment mortgage applicants have been trading for less than three years, and therefore do not meet one of the main criteria of most lenders.
2. Some applicants eliminate tax-exempt costs and declare a lower net profit than their actual income, which reduces the mortgage amount.
However, CIS mortgage lenders understand this income structure and use their gross income to assess their affordability, rather than relying on their business accounts or tax returns. This article will explain how to find a mortgage in the construction industry plan, how they work and get the best rates.
How to get commercial investment mortgages for applicants for the construction industry plan?
The CIS mortgage is not a different product but a term used for a standard mortgage consistent with the income structure of applicants who work as a contractor or subcontractor and are registered with the CIS scheme.
The construction Industry Scheme means that a portion of your contractor’s salary will be deducted from your income and paid in instalments against taxes and National Insurance Contributions. Lenders need to know that you are enrolled in the CIS scheme and thus properly assess your affordability.
How complicated is a mortgage for contractors and subcontractors?
If you are looking for a mortgage from a major lender, securing a competitive mortgage as a contractor can be difficult. However, working with an experienced broker in this area will make the process much easier. But in general, mortgages for self employed are more complex because many sole traders reduce their net profit by eliminating tax deduction costs before filing their tax return.
The effect is that you are properly reducing your tax liabilities, but in turn, your accounts and tax returns show less income than your actual wages and, therefore, can lend you money.
But using a mortgage lender familiar with the CIS scheme enables you to use the gross income figures shown on your CIS payslip, so you need a six-month payslip to prove your regular income. You may also be asked to provide copies of your trading accounts.
How can a mortgage broker help me get commercial investment mortgages?
As self-employment becomes more popular, you can find commercial investment mortgages at many banks and construction associations. However, it is always worthwhile to consult with an experienced broker before applying, as there may be much better rates for specialised lenders in this type of lending.
Especially if you are out of the “standard” eligibility criteria, a broker is almost certain that the broker can find a better deal for you. SWG Mortgages specialist advisors with years of experience negotiating with lenders for a wide range of commercial mortgages can help you use their most updated products.
How can a broker help me find the best mortgage lenders using the CIS scheme?
SWG Mortgages specialist advisors will assess the needs of your business investment mortgage and provide the right advice to ensure your application for the best. On the other hand, every mortgage case is a custom business investment, and our advisors are fully aware of how the lender estimates the applicants’ average monthly income, which means that they can provide the maximum possible mortgage value to applicants. SWG Mortgages advisors make an initial assessment, examining which lenders offer you the most competitive rates.
So if you are a CIS contractor or trying to find a mortgage, and you do not know where to start to find a lender who accepts CIS applications, contact SWG Mortgages advisory team!
The SWG Mortgages team is highly experienced in commercial investment mortgages and can provide custom advice on whom to apply for and the most competitive mortgage for you. However, not all banks offer CIS mortgages, so applying directly to your regular bank provider is often not the right solution. On the other hand, finding a lender will take your time and energy, and you will probably not get the desired result.
