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.
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.
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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.
Mortgages |
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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 advices and a recommendation as to which of the
mortgages available from the lender or via the intermediary is the 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 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
- mortgage interest tax relief
- whether you are required to pay a high
percentage lending fee, and if so what this means to you.
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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. |
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