There are three important things to think about when you take out a mortgage:
find the mortgage that suits you and your circumstances;
borrow an amount you can comfortably afford; and
plan for changes – interest rates can go up, your income can fall, or you could lose your job.
There are lots of banks, building societies and specialist lenders offering mortgages. Many also offer special deals for first-time buyers. You can usually go to these lenders directly, although they will only tell you about their own products. Or you can go to a mortgage broker who will be able to look at a wider selection of products for you.
Generally, firms selling mortgages have to be regulated by the FSA, or be the agent of a regulated firm. There are some exceptions, for example sales of buy-to-let and second charge mortgages are not regulated by the FSA. Regulated firms and their agents are put on the FSA Register and have to meet certain standards. Always make sure that the firm you use is on the FSA Register and is allowed to sell or advise on mortgages before handing over your money. If they aren’t regulated by the FSA and things go wrong, you won't have access to complaints and compensation procedures.
The FSA require firms to give you some documents called Key Facts which set out important information for you. They are:
Key Facts about our mortgage services – which will tell you:
whose mortgages they offer;
whether they offer advice or just information; and
how much you’ll have to pay for the service.
Key Facts about this mortgage – which will be tailored for you
based on how much you want to borrow and the type of mortgage. It will tell you:
the overall cost;
what you’ll pay each month;
what fees you need to pay;
if there are any special features of the mortgage; and
what happens if you don’t want it any more.
Do read them and ask questions if you don’t understand anything
