When an individual wish to materialize a real estate project, he may have an interest in entrusting his file to a mortgage broker. The goal: save time, get help and advice from a professional who knows the real estate market perfectly but also benefit from good borrowing conditions. However, is this the only option available to the borrower to lower their credit rate? Good Credit is studying the issue.
What is the role of a mortgage broker?
The mortgage broker is a specialist in banking operations and payment services. A fine negotiator, he acts as an intermediary between a credit organization and an individual in search of real estate financing. The real estate broker not only supports his client in his credit search, but he also draws up a precise analysis of his financial situation. Goal? The target for his client a real estate financing solution adapted to his profile, and more precisely:
- To its borrowing capacity;
- To its debt capacity;
- At its debt ratio;
- Personal situation (married, divorced, with or without children, etc.);
- To his professional situation.
Once all of this data has been collected, the mortgage broker prepares a file which he will present to various partner banks. The real estate broker is also able to advise his client on credit without personal contribution, loan repurchase, and borrower insurance.
What are the advantages and limits of the mortgage broker?
The mortgage broker works with several financing organizations and can have access to some of the best mortgage offers. In return for a certain volume of business, it is able to negotiate and obtain preferential credit rates from its partners. Negotiation can also be done around the acceptance criteria of banks.
Based on the profile of his client and the characteristics of his real estate project, the broker determines which organization offers the best loan conditions. This includes the credit rate, of course, but also the amount of the loan or loan repurchase, as well as the duration of repayment.
In short, a real estate broker takes care of everything in order to best defend the interests of his client. It also ensures that the latter takes charge of its request for real estate financing quickly. Brokers thus save precious time for their clients. This is all the more appreciable since the search for a mortgage often intervenes when signing a sales agreement. Finally, by entrusting their files to a broker, future borrowers are spared complex and time-consuming procedures.
Note: how much does a real estate broker cost?
Brokerage fees, which generally correspond to 1% of the amount borrowed, are only due if your request for real estate financing is successful. In other words, if you don’t sign anything, the services of a mortgage broker are free: another significant advantage.
But behind all these advantages, there is a limit: the real estate broker sticks to his network of partners, which means that he cannot study all the offers on the market.
Real estate credit broker: alternatives?
We will not speak of an alternative to brokers, but rather of a compliment. Indeed, it would be a shame to do without the expertise of a mortgage broker. However, nothing prevents you from prospecting in parallel, taking into account the advice he has given you. At time t, there may be an offer on the market at more advantageous conditions.
To verify it as quickly as possible, Good Credit recommends that you use online mortgage simulators and comparators. However, keep in mind that by operating by yourself, you will have less room for maneuver and negotiation, without forgetting the time to invest or the millimeter organization that will have to be shown.
In order to effectively compare the offer of the real estate broker with the offers you will have received from your side, two tips:
- Always compare offers with similar amounts and repayment terms;
- Systematically refer to the APR (this credit rate includes all costs, such as the nominal rate, administration fees, and borrower insurance).
Tip: also compare the amount of the application fees
Application fees are part of the fees that you must be able to pay with a contribution, unless, of course, you can take out a loan without contribution. The lower these costs, the less money you will have to advance!