The profession is recent since it appeared in France in the 1970s. Since then, more and more individuals have called on it to obtain the best mortgage possible. The mortgage broker has become over the years a valuable banking intermediary to obtain a good credit rate or to pass his file if it is complex. But if a loan offer is signed, who pays the mortgage broker? Is it the partner bank or the borrower? Everything you need to know about brokerage fees and fees.
Are there still brokerage fees to pay?
In reality, if successful, it is the bank that remunerates the real estate broker as a business provider. He then earns a percentage of the loan released, generally the commission amounts to 1% of the loan granted. To this share are added administrative costs that the borrower must cover.
Banks charge administration fees when signing a loan offer. Brokerage fees can then replace administrative fees. Generally, there is little risk that you will be asked to pay broker fees in addition to bank charges.
Brokerage fees are not payable by the borrower because brokers are remunerated by their banking partners. However, to avoid unpleasant surprises when the time comes, ask for the details of the fees in the offer or the mandate that the intermediary will present to you before the start of his mission. Professionals are required to be transparent with their clients when it comes to pricing. However, some “omit” to report the application fees for the lending bank. It is therefore essential to inquire beforehand.
Is soliciting a broker for your home loan free?
Soliciting a real estate broker is a free process as long as the loan has not been granted. The broker cannot therefore ask you for money even if he comes to your home for an interview. And this, in accordance with article L321-2 of the Consumer Code of December 11, 2001.
No payment of any kind whatsoever may be required from an individual before obtaining a loan of money. But of course, a real estate broker does not work for free. Its remuneration is active as soon as the loan is released.
Are mortgage broker fees negotiable?
The fees of a real estate broker remain negotiable, especially if it is a large brokerage firm. The more loans are produced, the more brokers are willing to negotiate the pricing of their services. On average, a broker’s fees are around 900 to 1500 euros.
When should the real estate broker be paid?
Should the mortgage broker be paid before or after signing the loan offer? In any case, regardless of the brokerage company or the independent broker, the fees will only be requested if the mortgage is signed. This is governed by article L321-2 of the Consumer Code.
If the broker asks to be paid before signing the loan offer, or if he asks you for a deposit check that he will not cash until later, contact the Regional Department for Business, Competition, Consumption, Labor and Employment (DIRECCTE). In fact, it is a fraud.
On the other hand, if your broker presents you with a loan offer that does not correspond to your request or to the commitment signed with him, you will not have to pay him anything.
Is it profitable to go through a broker?
Going through a real estate broker is first and foremost a time saver. The banking intermediary manages your file for you and settles all the details with the bank. He also negotiates the best rate. This is therefore favorable from a financial point of view.
Generally, the negotiation of the rate by a broker makes it possible to save around 20,000 to 30,000 euros on a standard real estate project. The amount is therefore not negligible.
What is a brokerage mandate?
As soon as the brokerage firm or the independent real estate broker takes charge of your file, it is necessary to establish a mandate. This formality is mandatory and regulatory.
As the borrower, you are designated as the principal and the real estate broker is the agent. The document must specify the amount of the fees, the partner banking establishments with their contact details, information on any conflicts of interest, etc.
Choose a good broker based on their pricing
If you decide to use a real estate broker to obtain credit from a bank, you can pay for his services. These are fees. The professional must be transparent about his pricing and the way he is paid when signing a loan offer. Thus, the real estate broker must tell you the remuneration received from the partner bank in the event of an agreement for the loan.
But before asking yourself the question “who pays the mortgage broker” and the amount of the fees, it is important to take into account a certain number of criteria in your choice of intermediary:
- first there is the feeling which must pass. It is important to have confidence in your real estate broker because he plays a major role in obtaining your credit;
- do not hesitate to ask for recommendations around you (family, friends…) and also consult customer reviews when you type the name of the independent broker or the brokerage company on search engines;
- also ensure that the intermediary has a solid network of banking partners. Is it competitive or is it limited to one or two collaborations? The denser the real estate broker’s network is, the greater your chances of obtaining an attractive loan offer;
- Finally, find out beforehand about the services provided by the real estate broker. Does he content himself with advice or does he accompany his client throughout the case?
Read also : Should you take a broker for a home loan?