Financial Services Authority (FSA) - Cheap Mortgage Deals

Since October 31st 2004, the regulation of the mortgage market has been under the control of the FSA, the FSA answers to the treasury. Previously the Mortgage Code was run the Mortgage Code Compliance Board and lenders and brokers had pledged to adhere to that code.

We are registered with the FSA, you can find our details on the Financial Services Authority's Register, registration number 314204.

What is the FSA?

The FSA hopes to bring clarity into the mortgage industry so that there is less confusion about the products and a clearer understanding for every one who takes out a mortgage as to what they are buying into.

Under the new regulations the FSA does not include Buy to Let mortgages. If you would like to check whether your broker is authorised under the new reguations (they will have a registration number) you can by visiting the FSA's own site.

The FSA has bought in two particular pieces of information documents that all borrowers must be presented with before they agree to sign up to any mortgage.

The two documents are; The IDD and The KFI. These forms are standardised and so borrowers can make direct comparisons.

The IDD

This is the Initial Disclosure Document which must be presented to the home buyer during the initial meeeting or if the mortgage is being arranged over the telephone, the key information has to be explained within a written document provided within five working days. The document must state the following;

  1. If advice was offered.
  2. If the advisor has access to all the mortgages currently available, if they use a selected number of mortgages or for just one lender.
  3. If there are any fees to be charged.
  4. Details of where and how to complain.

The KFI

The advisor must supply an accurate Key Facts Illustration before a mortgage application is made. The document must;

  1. Have full details of the mortgage product inluding monthly repayments and all fees and interest rate charges.
  2. Total cost of mortgage.
  3. Fees/commission the broker earns from placing the mortgage.
  4. The risk of rate changes and the inpact it would have on monthly repayments.
  5. The impact of changes to the borrower's personal status.