PART I: BOTH LENDERS
AND MORTGAGE INTERMEDIARIES
1. KEY COMMITMENTS
(1.1)
We, the subscribers to
this Code, promise that
we will:
- Act fairly and reasonably
in all our 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 our 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
our 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.
2. MARKETING OF MORTGAGES
Marketing loans
to minors
(2.1)
We will not send marketing
material indiscriminately
and, in particular, we
will be selective and
careful if you are under
eighteen years old and
where material relates
to loans.
Advertising
( 2.2)
We will ensure that all
our advertising and promotional
material is clear, fair,
reasonable and not misleading.
3. HELPING YOU TO CHOOSE
A MORTGAGE
Levels of Service
(3.1)
Choosing a mortgage
may be your most important
financial commitment.
At the earliest contact,
which we have with you,
we will provide you with
a copy of a leaflet entitledYou
and Your Mortgage, which
summarises the Code's
key commitments and explains
that there are three levels
of service which may be
provided under the Code.
We will tell you which
of these levels of service
we offer. These are:
(a)Advice and a recommendation
as to which mortgage is
most suitable for you.
When giving advice, we
will take care to help
you to select a mortgage
to fit your needs by asking
for relevant information
about your circumstances
and objectives. Our advice
will also depend on your
particular requirements
and on the market conditions
at the time. The reasons
for the recommendation
will be given to you in
writing before you complete
your mortgage.
(b)Information on
the different types of
mortgage product we
offer so that you can
make an informed choice
of which to take;
(c)Information on
a single mortgage product
only, if we only offer
one mortgage product or
if you have already made
up your mind.
Confirmation
of Service
Before you take out your
mortgage, we will confirm,
in writing, the level
of service given.
Alternative repayment
methods; Interest only
mortgages; Early repayment;
Interest rate alternatives;
Future repayments; Insurance;
Charges payable; Transfer
of Terms; Information
to credit reference agencies;
High percentage loans.
(3.2)
When providing information
to help you to choose
a mortgage, for the purposes
of (a), (b) and, for single
product companies (c),
above, we will give you
the following-
- An explanation of
the main repayment methods
we offer (for example,
repayment or interest
only) and the repayment
periods available;
- For interest-only
mortgages: A general
description of the types
of investment (for
example, endowment policy,
pension plan) or other
means which may be used
to repay the mortgage;
- An explanation of
the effect of failing
to make suitable arrangements
to repay the mortgage;
- Information on whose
responsibility it is
to ensure that an adequate
repayment method is
in place. Your lender
will remind you annually
of the need to make
sure that an adequate
repayment method is
in place;
- An explanation that
early repayment of a
mortgage, early surrender
of an investment, or
changes in personal
circumstances (for example,
long-term sickness or
relationship breakdown)
can have adverse financial
consequences, depending
on the particular type
of mortgage or investment;
- A description of the
types of interest rates
available (for example,
variable, fixed, discounted
and capped rates);
- An explanation and
illustration of future
potential repayments
at the end of any fixed,
discounted or capped
interest rate period,
based on the relevant
current variable mortgage
interest rate;
- A description of any
insurance services which
we can arrange (for
example, buildings,
contents, mortgage
payment protection and
life insurance);
- Whether it is a condition
of the mortgage that
such insurance be taken
out and whose responsibility
it is to ensure that
it is taken out;
- Whether it is a condition
of the mortgage that
such insurance must
be arranged by us;
- A general description
of any costs, fees or
other charges in connection
with the mortgage which
may be payable by you
(for example, mortgage
valuation fees, arrangement
fees, early repayment
charges, legal fees
and insurance premiums);
- An explanation of
whether your selected
mortgage terms (for
example, a fixed interest
rate) can be continued
if you move house;
- A description of when
your account details
may be passed to credit
reference agencies;
- If your mortgage
represents a high percentage
of the price or valuation
of your property (usually
75% or more), you may
have to pay a high percentage-lending
fee. Some or all of
this fee may be used
by the lender, at its
discretion, to obtain
mortgage indemnity insurance
to act as extra security
for its sole benefit.
If this is the case,
the lender will give
you a written explanation,
stating that: Such insurance
will not protect you
if your property is
subsequently taken into
possession and sold
for less than the amount
you owe;
- You will remain liable
to pay all sums owing,
including arrears, interest
and your lender's legal
fees;
- If a claim is paid
to your lender under
such insurance, the
insurers generally have
the right to recover
this amount from you.
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