Britain’s regulator for the financial sector, the Financial Services Authority (FSA), is currently floating proposals for a reform of the rules governing the selling and buying of a mortgage. The FSA has said that the new rules would provide increased protection and fairer treatment for borrowers who are falling behind with their payments – an increased worry in a time of economic uncertainty.

Under the proposals, a mortgage-holder in arrears would only see their property repossessed by the mortgage provider as a very last resort. The new FSA rules also aim to stop the borrower being hit with unfair charges.

The regulator is undergoing a review of the mortgage market in general, a process which has been taking place for more than a year. In autumn 2009, the first report from the review urged the Government to put an end to the self-certified mortgage, insisting that a mortgage applicant should always be able to demonstrate to the potential lender that they will be able to make all of the repayments.

The publication of the second set of proposals from the FSA will also require mortgage-providers not to bundle charges for early repayments with charges for existing arrears. Such charges will not be subject to interest either. As well as this, the monthly charge for arrears will be waived if the lender and borrower agree a repayment plan aimed at dealing with the arrears problem. Finally, borrowers in arrears will see any of their payments going first and foremost to clear the arrears, rather than paying off charges for the arrears.

The FSA said that it hoped that the proposed reforms will go a long way to resolving problems within the mortgage market caused by misunderstandings. It expressed the hope that borrowers will welcome the plans. With more than 2,000 mortgage products on the UK market, and a home loan being the greatest financial undertaking that most people will ever make, it is indeed important for borrowers to feel that they are being treated fairly.

However, in order to maximise the chances of this from the very beginning, anyone seeking a mortgage should look to the skills of a professionally trained mortgage broker or an independent financial advisor. Such individuals are invaluable when it comes to matching their clients’ personal needs with one of the large range of mortgage products available on the open market, and they often have access to products that are not so visible as well. The utility of a mortgage broker is apparent in the figures, with around 70 per cent of all mortgage applicants engaging expert services before they finally settle on the mortgage that is right for them.