The Mortgage Code

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WHAT IS THE MORTGAGE 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 MORTGAGE 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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