The mortgage broker is a financial professional who acts as an intermediary between the borrower and banking institutions.
This expert, increasingly known to the French, is sought after by more than 35% of households. What are the advantages of going through a broker? How much does it cost ? We are going around the question to better support you in your project …
Who is the mortgage broker?
The mortgage broker is an IOBSP (Intermediary in Banking Operations and Payment Services) registered in a professional register proving both his expertise, his knowledge and his integrity. He generally holds a license in insurance banking or an equivalent diploma with a few years of professional experience to his credit.
The profession has developed strongly over the past 20 years and this banking professional is no longer unknown to the French. The traditional broker operates on his own account under his own brand or becomes a franchisee. At the same time, online real estate brokerage offers are becoming essential.
His job is not only to put the borrower in touch with the lender, but also to negotiate interest rates, loan terms and associated insurance. He also supports his private or professional client in the preparation of his file, to show it in its best light to the banking establishments with which he works.
A broker for his mortgage, what advantages?
Despite the overall very low borrowing rates for the year 2020, the enthusiasm for the real estate broker is not waning. This is no coincidence, because you have more than one advantage in going through a mortgage broker …
The broker does almost everything for you. He approaches each bank by using his address book and his knowledge of local branches. He therefore negotiates upstream the mortgage offers best suited to your personal situation and your borrower profile.
For you, the time spent making an appointment at each bank is often time taken from your free time. Then you must then dissect the loan offers and understand their conditions. A volume of hours that quickly becomes time-consuming for a result that is often hazardous.
Provide technical support
Brokers have a good knowledge of mortgage and legislation. By studying your income and your situation, they can be excellent advice in putting together your file.
Depending on your income, they can determine if you are eligible for zero interest loans or other approved loans. Depending on your project, they can also direct you to loans aimed at reducing energy costs, etc.
Obtain advantageous loan conditions
Despite historically low rates, the broker has bargaining power that you don’t have, mainly because of the volume of business they can bring to a financial institution. Thus, a loan rate posted at 1.50% could well drop to 1% by using its services.
Indeed, banks have rate schedules reserved for excellent borrower profiles. By having just a good record, you too could become an “excellent client” thanks to the intervention of the mortgage broker.
Also note that he works in a privileged way with one or more insurers specializing in borrower insurance. This insurance, systematically backed by your mortgage, can save you thousands of euros on the total cost of your credit by choosing the right contract.
Finally, he can also negotiate for you the abolition of IRA (Early Redemption Indemnities) or a “flexibility” or “credit break” option which will allow you to adjust your deadlines or to postpone them over a few months in the event of financial difficulties. temporary.
Good to know : you are only engaged with a broker once the mandate has been signed and the loan offer has been obtained, this means that you are not required to pay his service if you find a better loan offer elsewhere.
Broaden the fields of investigation
As a private borrower, there are a number of banking establishments that you are not going to approach spontaneously. These may include banks that do not give you the image you think they convey.
For example, La Banque Postale may seem outdated if you are a young borrower, or HSBC may seem too upscale if you have intermediate incomes. However, the two establishments are looking for customers with diverse profiles.
The broker, who talks to them regularly, is better able to knock on their door for your file. In addition, he will have handpicked for your offers to present you only the most relevant. Often, one or two meetings are enough to sign the final loan offer.
How much does a mortgage broker charge?
The price of a real estate broker will differ according to his mode of operation, his expertise and the complexity of your file. In all cases, the costs are known in advance, either in the mandate that you sign with the broker, or in the loan offer issued by the bank.
Here are some examples of what are often mistakenly called “brokerage fees”:
- You pay administrative fees to the bank but do not pay brokerage fees: this is often the case by using an online broker (this one receives a commission paid by the banking establishment)
- You do not pay brokerage fees but do not pay administration fees to the bank: the broker has negotiated the elimination of fees in return for his remuneration and the preparation of your file (he then receives remuneration from his client and a commission of the banking establishment)
- You pay brokerage fees in addition to the application fees: everyone worked on your file and both the bank and the broker are paid
Whatever the final configuration, the mortgage broker always receives a commission from the bank, it is of the order of 1% of the total amount of the loan (excluding assisted loans). Whatever the nature of the costs you incur, they are integrated into the APR (Annualized Global Effective Rate), which allows you to compare offers easily before committing.
Should you go through a broker for your mortgage?
There is no easy answer to this question. It depends on many parameters, such as your income, your borrower profile, your ability to sell yourself, your real estate project, etc.
But there is one certainty, it is always good to compare before choosing whether or not to go through a broker. For an approach that is fast, simple, free and without obligation, use an online comparator to put the banking players in competition yourself.
This simulation allows you to know what conditions you can obtain by yourself with a facilitated connection, in order to decide objectively whether or not to follow up on brokerage offers made by a broker.