CIS mortgage questions

Minnie82

Hi,

So we are hoping to move in a couple of years. My husband is main earner and has been self employed for the last 5 years. He's a Ltd. Company but works under the CIS scheme. He's done this for the 5 years always in the same job type (joiner) but working for different companies. The last 1.5 years he's worked mainly for 1 company and sometimes a 2nd depending if the 1st company are waiting on deliveries to sites etc. (he fits kitchens in new build sites, he's not one of the shoddy ones though I promise). Does he have to work for 1 company only in the run up to a mortgage application? All the work is exactly the same but just 2 different companies he invoices, they send him remittance and he gets paid less 20% tax.

If using 2 companies limits the CIS mortgage application is it a self employed application we would need to do? I'm worried because years ago I wanted to remortgage and the adviser said we didn't pass affordability (for the mortgage we already had...) because of the way his accountant processed it all (dividends or something, it was years ago so I'm struggling to remember).

Also, in both of these cases how would affordability be calculated? I just want to have everything clear in my mind for how everything works....because mainly I'm a bit of a control freak tbh:eek:

[Deleted User]

I usually use Halifax for my CIS stuff.
Halifax's policy is that if the income is derived from more than one contractor then the applicant must be treated as self employed. Obviously in your case that would mean they wouldnt take it as emplyed income

Some lenders will use salary + dividends
Some lenders will use salary + share of net profit after corporation tax.
Some will use salary + share of net profit before corporation tax (the before tax bit can sometimes increase the lend amount quite significantly.

Hope that helps a bit. Need some numbers to tell you much more.

Minnie82

Hiya,

Thank you, it could easily end up being the case that for 6 months before we apply he only works for one company ( its been the case that he's been with just one for 9 months/a year but then the other companies will fill his time if needs be) but good to know what will happen if that's not the case.

Numbers....I'll have a better idea when his stuff comes back from the accountant or we get previous years down from the attic but gross last year around 67k for him(year before be slightly less I'd imagine) and I'm part time 10.5k. Houses we are looking at would e around 275k max and we will have around 60 equity in this one. Nothing else will be added as we will pay all fees upfront, don't think we have stamp duty in Scotland....I'm a bit hopeless. I'm not really fussy how the mortgage is done, just be good to know that with what we earn we could hopefully get what we need.

When looking at his old books what am I looking for? Thanks again