The mortgage code is a set of minimum standards of good practice set by the Council of Mortgage Lenders in the UK that mortgage lenders subscribe to on a voluntary basis. The goal of the mortgage code is to protect potential borrowers by setting out standards on how to conduct their business.
The mortgage code was introduced for lenders in July 1997 and for intermediaries in April 1998. The general standards lenders and/or intermediaries have to comply with include: how mortgages should be arranged, what information you should receive from the lender and how your mortgage will be dealt with once it is in place. There are also other requirements that lenders and intermediaries have to comply with to safeguard the consumer.
The mortgage code also tell you how and to whom you can lodge a complaint, if the lender did not comply with these standards and you ended up suffering because of it. Each registered lender and intermediary has a registration number, make sure you make note of it, if any irregularities occur and use it when lodging a complaint.
In the UK, there currently are over 150 lenders and 13,000 intermediary firms, such as mortgage brokers, who are registered under the mortgage code. So, make sure when you begin looking for a mortgage lender that you check that they are a registered firm with the mortgage code. Also, registered lenders will not deal with unregistered intermediaries, giving you an added layer of protection.
At your first discussion with a registered lender or intermediary, you will be given a pamphlet titled ‘You and Your Mortgage’ and it will outline the standards which the lenders and intermediaries have to comply with. This pamphlet is currently available in seven different languages, apart from English: Cantonese, Hindi, Punjabi, Urdu, Welsh, Gujarati and Bengali.