Should I go through a broker for a mortgage?

How does the mortgage broker work?

Mortgage brokers offer individuals to replace them in order to obtain the most attractive loan offers. They compare the best online or physical mortgage offers and guarantee you find the best rate for your loan. Typically, large brokerage networks claim to work with more than a hundred banks. In fact, if they do indeed form a large number of partnerships, they hardly work with more than a dozen banks. And the same file will not be offered to more than three or four bankers.

Brokers actually have rate schedules concocted for them by banks.For a particular profile, the broker thus immediately identifies the establishment that will accept his file and at what rate. The real negotiation thus takes place, essentially, for very good files. Still, the “good” broker can also provide you with very useful technical advice to build your file and sometimes make it “acceptable”.

So should we prefer large networks or independent brokers?There is no single answer. There are very good technicians within the large networks, as well as very bad ones, trained in a few days, even a few hours. Same thing with the independents where the best rubs shoulders with the worst. Word of mouth remains the best guarantee. On the other hand, do not trust the classified ads, any more than the many advertisements that flourish on the Internet. If the broker assures you, before examining your file, that he will be able to find financing, this is a bad sign. Likewise if he promises you a “much more competitive rate than his competitors”.

Before using a broker, we advise you to do simulations to get an idea of ​​the rates you can claim. Having some knowledge of the market is the best solution for not accepting the first rate offered. Thanks to our free and 100% online tool, you will be able to obtain a rate simulation according to your borrower profile.

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In addition, in any case, you must not pay any commission before signing the deed at the notary ( article L 321-2 of the consumer code ) and do not have to sign any document that commits you to the broker. , with the exception of the mandate authorizing him to present your file to the banks. On the other hand, do not hesitate to ask in writing the amount of the commission to be paid to the broker (maximum share 1% of the loan except very complex file).

This professional is officially an “  intermediary in banking operations and payment services  ” (IOBSP).The broker can save you valuable time because he will look for and negotiate a mortgage for you if you have a good file. Generally, he will not waste his time with a case that has little chance of succeeding! Its activity is now regulated by the Monetary and Financial Code and subject to the control of the Prudential Supervisory Authority (ACP), the armed wing of the Banque de France. He must have taken out civil liability insurance and be registered with Orias, the body in charge of keeping the single register of insurance, banking and finance intermediaries, to which you have access to check his registration via the website of the Orias (single register section).

By contacting a broker, you officially instruct them to seek financing and represent you with banks . To do this, you will sign a brokerage agreement with him, also called a “capital search mandate”, a mandatory contract, required by law. This mandate, in which the client is designated by the words “the principal” and the broker by that of “agent”, indicates what he must look for according to your instructions: amount, form of credit, duration, rate range , etc. Currently, the mandates are simple, but nothing prohibits a broker from offering his clients an exclusive mandate, in which case your freedom would be limited.

The mandate he has you sign must clearly indicate the amount of the brokerage feesthat you will have to pay him.Great vigilance is required, knowing that there are many remuneration formulas. Some brokers charge their fees to the borrowing client, up to approximately 1% of the amount borrowed. Legally, there is an obligation of information, but no limitation, the note can cross this symbolic threshold of 1%. Some brokers do not claim fees from borrowing clients and are remunerated solely with the commissions paid to them by partner banks. The practice of combining the payment of fees by borrowers with commissions paid by banks seems to be a minority practice, but is not prohibited. Brokerage fees remunerate the broker’s research work but do not replace the application fees due to the lending bank.

The broker must also tell you if he has financial links with the bank or banks that are his partners and if he has made the commitment to work exclusively with a limited number of insurers or mortgage banks, or even with just one. The monetary and financial code allows you to require the name of the bank or banks. Absolute prohibition, for the broker, under pain of penal sanctions, to ask for expenses, fees, remunerations, provision, commissions or sums under any name whatsoever before the effective payment on your account of the money borrowed. A prohibition that also applies to direct lending banks.