Case study – Construction Industry Scheme mortgage vs 1 years self employed mortgage

Case study – Construction Industry Scheme mortgage vs 1 years self employed mortgage

A client recently contacted Mortgage Experts Online looking for a Construction Industry Scheme mortgage These are alsoknown a CIS mortgages. There were several issues the client came up against when trying to obtain a mortgage. Our experts have access to the whole of the market and are Construction  Industry Scheme mortgage specialists. They were able to assist the client and get the maximum borrowing available.

One of the clients was in a Debt Management Plan (DMP),  the other was a Construction Industry Scheme (CIS) worker. They were able to find a lender who was happy with the credit profile, they were struggling to get the required affordability to achieve the loan amount they required.


Construction Industry Scheme mortgage

The income broke down as follows.

Income 1 – £19,056.

Income 2 – £19,750.

Benefit income – £1,076.

Income 2 shows as £19,750 in the above scenario, this was taken off the self-assessment tax return (SA302) and tax year overview. The client had in fact earned £25,577 through the Construction Industry Scheme (CIS).

They were able to write off certain allowable expenses against their income. Such examples are mileage, tools and administrative costs associated with the running of his business.

Based on the one years self employed income, the maximum the lender was willing to offer taking into account the clients ongoing credit commitments was £159,528.

How the mortgage expert helped.

The specialist mortgage advisor looked at the figures and knew it was more preferential to look at borrowing against the Construction Industry Scheme income.They used the latest 12 months being evidenced on the Construction Industry Scheme vouchers.In total this gave  a combined household income of £45,709. This mean that the maximum borrowing could be £205,690.

Looking at the Construction Industry Scheme income rather than the one years self-employed income gave the clients £46,162 additional affordability.

Certain costs had to be taken into account when using the Construction Industry Scheme income for assessing affordability (such as fuel costs which had been written off against tax), however this still gave a significantly greater loan amount when compared to the affordability being based on one years self-employed income.

For more information on the Construction Industry Scheme click here

Most of the time you can get better affordability using the Construction Industry Scheme income. This isn’t always the case. Your mortgage expert will run through all the facts and figures with you. They will look at which option is the best for you. With this sort of mortgage it can make a big difference to borrowing amounts.

Construction Industry Scheme mortgage advisors

There are many lenders available ranging from high street to specialist lenders. Most people go to their own bank, get declined or can’t borrow what they need – just because one lender has declined you, don’t give up.

Our mortgage experts will look at each case before deciding which lender is right for you and your individual circumstances. All the mortgage brokers we work with are whole of market and offer unbiased advice. They will have access to all the specialist lenders to really enhance your chances of achieving the mortgage you need.

The expert brokers we work with have experience in dealing with all aspect of Construction Industry Scheme mortgages, and importantly using the whole of the market to access the very best deals available.

To find out how we can help call us on 0300 124 5655 or complete our quick enquiry form to speak to a mortgage expert.


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