What is a Construction Industry Scheme mortgage?
A CIS mortgage is a term you might hear when a contractor or subcontractor who’s enrolled in the government programme, is applying for a mortgage.
A mortgage lender will need to know that you are enrolled in CIS if you trade as a contractor as it will be relevant when it comes to assessing your income.
Not all lenders offer CIS Scheme mortgages, and those that do may have different lending criteria. Typically, CIS Scheme mortgages allow subcontractors to prove income using the gross amount shown on the payslips they receive from contractors, rather than having to provide business accounts or a SA302, which shows the year-end tax calculation from a Self-Assessment tax return. This can be helpful to applicants with less than two years’ worth of accounts to show.
CIS lenders generally assess applicants on a case-by-case basis. Typically, to qualify for a CIS scheme mortgage you can expect to be asked to provide your CIS payslips for at least the last three months, sometimes six. They will be used to calculate an average monthly income, from which an annual income figure will be worked out. You may also need to provide bank account statements for the same period.