We often talk about mortgage broker without necessarily identifying the structure behind it, here is a complete point on this bank intermediary.
A broker is an intermediary in banking operations appraised in a particular product, such as for example the mortgage loan. His role is to offer an individual one to several financing offers, he will then take charge of the mission of research funding based on the situation of his client. He is mandated by the client, unlike an agent who is mandated by the credit institution.
The broker must master the mortgage market to quickly know where to go when a client asks for a mortgage. Each situation is particular and requires a thorough study, it is this aspect of the broker that is particularly appreciated by individuals, the concept of proximity and “custom”.
As a bank intermediary, the broker must be registered with ORIAS as a COBSP, ie a broker in banking operations and payment services. This registration is necessary to be able to offer financial services, as well as the minimum experience in the field of finance of 2 consecutive years or a training of 6 months minimum.
These measures were implemented following the Consumer Credit Act, the aim being to professionalize the profession by preserving only the professionals, ie the brokers who scrupulously respect the legislation.
The broker works under mandate, that is to say that it is paid only if the file succeeds. It is therefore better to present to his client an interesting offer, allowing him to realize his project in the best conditions. For this, the broker has good addresses and knows the criteria of banks, so he knows how to submit a file in its best light.
Some real estate brokers have strong partnerships that allow them to benefit from better offers, which is often the case with the intermediary who is well established. Competition is at the heart of its approach, it is based primarily on the borrower profile. This notion is fundamental because the real estate broker is not going to approach in the same way a search for an offer for a couple who wishes to buy his first home that for a rental investor. In general, each request is unique and requires a personalized follow-up.
It is common for borrowers to use several financial organizations in their efforts, including a broker. This makes it possible to compete with the different structures and to be able to compare the offers. That said, few households know exactly how to compare mortgage offers. The overall cost of the credit (or total amount outstanding) must be evaluated to determine the total amount a borrower will have to repay according to the schedule. The other point lies in the amount of the monthly payment because ideally, the broker must propose a deadline to remain under a debt ratio of 33%. The APR is also an important concept, but to be coupled with the total cost of credit.
Finally, the TAEA is a very important point and too often overlooked. This is the effective annual rate of insurance, it can assess the cost of insurance, it must also integrate this part to the comparison because the cost offers can vary from single to double. The real estate broker has a duty to advise his clients, he must accompany them, ensure regular monitoring and especially advise his clients on the management of their finances.