The simple answer is that different lenders apply different calculations.
Typically, it is the average of the gross amount you were paid over the last 3 - 6 months (before the CIS 20% deductions).
This figure is then annualised, to give the lender an indication of the amount you would expect to earn over the course of a year.
You are able to borrow around 5 times this figure on a mortgage, on average.
For example, if your day-rate is £100, and you work 5 days per week, you have a weekly gross salary of £500.
If you are paid weekly, then the calculation becomes £500 x 48 weeks (assumed by most lenders) = £24,000 annualised salary for mortgage purposes.
At five times this amount, it might be possible for you to borrow £120,000.
However, the amount is also affected by your existing loans, credit cards and any finance arrangements already in place; so that figure is just a guide.
A good credit history is also important, but it’s not disastrous if you have minor issues that were registered more than 24 months ago.
We specialise in contractor mortgages and our expert advisers have many individual success stories, obtaining mortgages for our clients from reputable High Street lenders even if there were small historic credit issues.
Many of you may have become a CIS contractor only recently.
Most other brokers, and banks, struggle to find a mortgage suitable for someone who has a continuous record as a CIS contractor running for less than 12 months.
But this isn’t a problem for us. Where others may have failed you, we are confident we can find a suitable mortgage.
Based on our specialist understanding of the CIS Scheme, our expert mortgage advisors can present a good case to the mortgage underwriters on your behalf. We'll not only try to help secure a mortgage for you, but if we do it will also also ensure it is for the maximum possible multiple of your allowable income.
Call us now to see how we can help you.