It's just as well the housing market is slowing sharply in the second half of the year - because homebuyers are about to find that fixing a mortgage means a lot more paperwork. October 30 was the long-awaited M - for mortgage - Day. It heralded the date when high street lenders and 10,000 brokers around the country had to become registered with the Financial Services Authority - the Government's city watchdog - to abide by much tighter rules and regulations intended to ensure consumers aren't saddled with the wrong loan. Until now, loans were covered by a Mortgage Code intended to improve the quality of advice and service. The new, tougher rules mean most mortgages - but not buy-to-let and equity release ones - now face similar controls to personal pensions, unit trusts and other investments. Information from brokers must now be clear, comparable and comprehensive, enabling buyers to make clear and informed choices between various loans on offer. A detailed assessment of the mortgage offer, running to five pages, could leave buyers too punch drunk to ask for another. "Cold calling" homebuyers to offer new, cheaper loans has become illegal - unless they somehow invite the approach in the first place. And adverts must now detail the less favourable terms of a loan, like early repayment penalties, alongside "goodies" like cashbacks designed to catch the eye. Of course, buying a home is the biggest spending decision most of us ever tackle, so it is hard to argue against the idea we heed as much advice as possible before taking the plunge. But the cost of all the new rules and paperwork could top £150m - roughly £100 on each loan sold - which consumers are likely to have to pay in one form or another. And it means we are probably leaving the old world when we told a broker to find the cheapest possible rate as fast as possible in the race for a dream home - and into a regime when everybody should write down who said what and to whom, in case things come unstuck later on. Borrowers, for their part, must know the difference between advice and information - because they can only seek redress later for the wrong advice. The new rules make the safety net of compensation much stronger - with a reserve fund paying out if brokers go out of business before a claim is resolved. Mark Chilton, chief executive of Purely Mortgages, a new national fees-free mortgage broker, says: "Much of the new disclosure regime is good news, because it provides added clarification to consumers. It should make products and services more transparent - if customers take notice of two very important disclosure documents introduced to the mortgage sale process." The Initial Disclosure Document (IDD), given to the customer at the start of their contact with a mortgage advisor, provides information about the advisor and the firm they represent, and should enable the customer to decide whether or not to use their services. The Key Facts Illustration (KFI), given to customers when a product is recommended or when product information is given, could run to five pages of details. It must show the true cost of a mortgage, detail any fees paid by the lender to an intermediary, and be carefully considered by a buyer before the application goes ahead. The new paperwork could force brokers to charge more - where many were satisfied with payment from the lender for introducing new business. Mark said: "When customers can clearly see what brokers are paid by the lender, will they really stomach paying a fee as well?" * To check whether a broker is authorised, call FSA helpline on 0845 606 1234 or visit www.fsa.gov.uk. | 
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