The FSA regulates most mortgage sales in the UK and offers quality, independent advice helping you to make the best possible choice. The FSA Money Made Clear website is at www.moneymadeclear.fsa.gov.uk.

A 'mortgage' is a loan secured against your home. 'Secured' means that if you do not keep up the payments, the lender can sell your home to get its money back.  Remember: Your home may be repossessed if you do not keep up repayments on your mortgage.

How much should you borrow?
You can typically borrow up to three and-a-half times the main earner’s income before tax, plus one times any second earner’s income, or alternatively two-and-a-half times their joint incomes (if this is larger).
Your mortgage lender may only count half of income such as overtime, commission or bonuses unless this is guaranteed. Mortgage lenders may reduce the amount they will lend if you have substantial outgoings such as other loan payments.

The credit crunch and the Northern Rock crisis last year has resulted in most lenders tightening up on their lending criteria including the amount that can be borrowed against a properties value. Falling property prices mean that 100% mortgages are no longer available from most lenders.

We recommend seeking expert advice in selecting the most appropriate mortgage for your circumstances. moneyjungle.net does not offer financial advice but we can connect you with an impartial, FSA qualified adviser.

Click here and complete a simple form and an adviser will call you back to discuss mortgage options tailored to your needs.

If you are getting advice, the adviser has a duty to take reasonable steps to ensure that you can afford any mortgage that he recommends. Whether you get advice or not, lenders are required to lend responsibly. This means that they should, based on things like your income, expenditure and other circumstances, consider whether you can keep up the mortgage repayments now and in the future; for example after an initial discount period comes to an end.

Click here for a useful article on how to deal with worries about your mortgage.

The new FSA Money Made Clear website offers free impartial advice on selecting a mortgage and can be found at www.moneymadeclear.fsa.gov.uk.

Try the mortgage calculator in Money Jungle Money Tools

Payment Protection Insurance

Payment Protection Insurance (PPI) can offer security and peace of mind but be sure to check that the cover offered is appropriate for your circumstances and make sure that you understand what the cover costs.

Many people have paid for expensive payment protection insurance when taking out mortgages, only to find that a claim is turned because of exclusion clauses in the small print. PPI can add anything up to 50% to the cost of loans.

It may be that the terms where not fully explained or that the cover was unsuitable for an indivudual's circumstances. Anyone who feels that they were mis-sold PPI should complain and seek compensation.

The first thing to do is to contact the company that sold you the policy and give them a chance to respond. If you are not satisfied your next port of call is the Financial Ombudsman Service. The Financial Ombudsman Service website includes helpful information and a fact sheet you can download. See also guidance on the FSA Money Made Clear website.

See also Buying a Home

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