The mortgage broker can be solicited by both banks and borrowers. Whether free or paid, this professional will systematically receive a fee from the bank in which the loan is granted. The notion of “free broker” means only that the free broker will not charge fees to his clients . Efficiency of one and the other does not come into play.
What are the methods of remuneration of a broker?
Facilitating the connection between a bank and the borrowers, the broker can receive a commission from the bank and fees from his clients:
- Representing approximately 1% of the amount of the loan granted, the remuneration commission is precisely defined in the commercial agreements entered into between the broker and each bank. Note that it is not reflected in the borrower’s financing proposals. It comes in exchange for a relationship that would not necessarily be made without his help: they are paid as a business contributor.
- Paid by the customer, the fees of the broker are freely fixed by the latter – either in a fixed way, or around 1% of the amount of the loan granted. Reminder: this remuneration is payable only if the mortgage is signed, in accordance with Article L321-2 of the Consumer Code.
In any case, the mortgage broker can only be paid if the loan file is accepted. They therefore have every interest in denouncing the weaknesses of a financing plan, in correcting it and thus optimizing the chances of going to committee.
Are paying brokers more efficient than free brokers?
The concept of “free broker” is intended for borrowers : these professionals simply chose not to charge their clients. However, this intermediary does not offer his services for free, but his services are covered by the commission of the bank.
In fact, the free broker is not like a discount broker : his quality and skills do not come into play in this appellation. Moreover, all these professionals are subject to the same regulations of Intermediaries in Banking Operations and Payment Services (IOBSP) and the same code of conduct (Code Monétaire et Financier).
Before the actual payment of the money intended to finance the purchase
On this point, the paying broker has the obligation to establish, in writing, the amount of his fees, which can not be perceived – in any way – before the actual payment of the money intended to finance the purchase.
Whatever the method of remuneration adopted, the use of a broker generally allows the buyers to earn between 0.40% and 0.50%, compared to the offer of a bank made without this intermediary. Knowing perfectly the commercial policy of the establishment, he is competent to negotiate the best rates, according to the profile of the applicant. Obtaining the most attractive offers for borrowers to the most comfortable situations (high level of income, wealth, debt ratio …).