The Mortgage Code is a code of conduct that all companies operating in the financial sector of mortgages must adhere to, and is over seen by the Mortgage Code Compliance Board. Their role is to make sure that you, as the borrower, are fully informed and sufficiently protected when taking out a mortgage. The Board insure compliance through an ongoing curriculum of inspection and fulfilment cooperation visits. In addition, 'mystery shopping' and customer investigation exercises are regularly conducted to make sure that mortgage consumers are getting the full benefits of the Code's protection.

The mortgage codes purpose

The Mortgage Board is a non-statutory supervisory body. Its role is to regulate the supply and stipulation of mortgage advice in the UK by ensuring firms registered under the Mortgage Code, meet all the principles of the Code.

The Mortgage Code sets values of good practice as to how mortgage lenders and intermediaries deal with their customers. All mortgage lenders and intermediaries that are registered with the Board keep strictly to the rules and principles set out in the Mortgage Code.

You, as a prospective mortgage customer, must be given a copy of the leaflet 'You and Your Mortgage' at your first conversation about a mortgage. The leaflet outlines the standards to which mortgage lenders and intermediaries have to adhere.

When sourcing your mortgage you should check that your lender or intermediary is registered under the Mortgage Code. More than 150 lenders and 13,000 intermediary organizations, covering virtually the entire market, have registered under the Code. If a mortgage lender or intermediary fails to meet the standards of the Mortgage Code, and you, the borrower, suffer as a result, you have the right to seek compensation under an obligatory complaints procedure.

Some useful tips

The DTI (Department of Trade and Industry) has compiled a checklist of key questions that customers are advised to refer to when considering taking out a mortgage. This is based on information from findings by researchers on the matters that have caused problems for customers in the past.

· What sum can I afford to borrow?

· Do I have the option of making lump sum payments?

· What method of repayment should I choose?

· How do I go about knowing which mortgage rate is the best for me?

· What happens in the eventuality I an unable to pay?

· Will there be UN foreseen charges to pay? - Examples may include intermediary's arrangement fees and lenders' application fees.

· Will I incur redemption penalties?

· What about hidden clauses in the small print?

In addition it is recommended that you make yourself aware of the foundation on which interest is calculated on your mortgage.