The Mortgage Code
(Please note that the mortgage code is no longer current, the FSA
now regulates the industry.)
WHAT IS THE CODE?
The Mortgage Code sets the minimum standards of service that borrowers
can expect from mortgage lenders and intermediaries which subscribe
to the Code. Visit the Mortgage Code Compliance website at:
www.mortgagecode.org.uk
THE CODE'S KEY COMMITMENTS
The Code has ten key commitments. These specify that lenders and
intermediaries will -
* Act fairly and reasonably in all dealings with you;
* Ensure that all services and products comply with this Code, even
if they have their own terms and conditions;
* Give you information on services and products in plain language,
and offer help if there is any aspect which you do not understand;
* Unless you have already decided on your mortgage, help you to
choose a mortgage to fit your needs;
* Help you to understand the financial implications of a mortgage;
* Help you to understand how your mortgage account works;
* Ensure that the procedures staff follow reflect the commitments
set out in this Code;
* Correct errors and handle complaints speedily;
* Consider cases of financial difficulty and mortgage arrears sympathetically
and positively;
* Ensure that all services and products comply with relevant laws
and regulations.
CHOOSING A MORTGAGE
The section on helping you to choose a mortgage explains that there
are three different levels of service which might be given. These
are advice and a recommendation as to which of the mortgages available
from the lender or via the intermediary is most suitable for you,
information on the different types of mortgage product on offer
so that you can make an informed choice of which to take, or information
on a single mortgage product only, if only one mortgage is offered
or if you have already made up your mind.
Whichever level of service is provided, you should find that before
you finalise your mortgage you have been given information on all
the following aspects. If you are unclear about any of these, check
with the lender or intermediary who is arranging your mortgage.
* The repayment method and the repayment period
* The financial consequences of repaying the mortgage early
* The type of interest rate - variable, fixed, discounted, etc.
* What your future repayments after any fixed or discounted period
might be
* Whether you have to take any insurance services with the mortgage,
and if so whether the insurance must be arranged by the lender/intermediary
* The general costs and fees which might be involved with the mortgage
- valuation fees, arrangement fees, legal fees, etc.
* Whether your selected mortgage terms can be continued if you move
house
* When your account details may be passed to credit reference agencies
* Whether you are required to pay a high percentage lending fee,
and if so what this means to you.
If you are using the services of a mortgage intermediary to arrange
the loan, you should also be told if they are receiving a fee from
the lender for the introduction of the mortgage, and whether they
usually arrange mortgages from a selection of preferred lenders
or from the market as a whole.
COMPLIANCE WITH THE CODE
Compliance with the Mortgage Code is monitored independently. In
addition, any organisation subscribing to the Code must be a member
of a recognised complaints scheme - the Banking Ombudsman, the Building
Societies Ombudsman, or the Mortgage Code Arbitration Scheme. Your
lender or intermediary will be able to tell you which scheme applies.
Copies of the Mortgage Code are available from your mortgage lender
or mortgage intermediary.
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