Choosing a mortgage – where to start :Cross Stitch – Money, tax and benefits

With hundreds of mortgage deals on the market, it’s hard to know where to start. You can use a mortgage broker, or shop around yourself and go direct to the lender. Whatever you decide, it’s important to understand how mortgages are regulated and sold.

Mortgage brokers must be authorised by the Financial Services Authority (FSA) or must be agents for authorised firms. The FSA is the UK’s financial regulator set up by government to regulate financial services and protect your rights. Its standards require firms to be competent, financially sound and to treat their customers fairly.

This means mortgage firms have to give you certain documents with the ‘Keyfacts’ sign. Keyfacts documents are set out in a standard format to help you compare different services and products with each other. The two mortgage keyfacts documents are: ‘Keyfacts about our mortgage services’ and ‘Keyfacts about this mortgage’ (sometimes called a key facts illustration or KFI).

If you get written information about mortgage products, it doesn’t mean you’ve had advice. Getting advice means that the adviser looks at your particular circumstances and recommends a mortgage that’s suitable for you. Buying with advice puts you in a stronger position to complain and get compensation if you later discover that the mortgage is unsuitable.

If you take out a mortgage over the internet, by phone or by post you might not have the option to get advice. Consider whether you need to get advice before you buy.

The Keyfacts document ‘About our mortgage services’ will tell you whether you’re being offered information or advice.