Find your new life
Have you found your dream home and signed the preliminary sale agreement? It's time to focus on financing your future home. However, securing a loan is not always straightforward, especially if you are not French! This is where understanding why use a mortgage broker can make a big difference. To simplify and speed up the loan application process, many people turn to these professionals. What are their roles? How much does it cost? We explain everything here.
A broker is a banking professional whose job is to find the best interest rates and conditions for your financing request. Thus, they act as an intermediary between you and the banks, assisting you in your loan search.
Firstly, a broker saves you time. As an expert in their field, they know all the ins and outs of the financing process. They will request all the necessary documents to compile your file and then present and advocate for it with various banks to secure the best offer.
There's no need for you to do the research: their industry knowledge enables them to know which bank to approach for a loan based on the type of project or profile and to negotiate the best terms. The broker can also calculate your financing capacity and debt ratio to estimate the monthly repayments.
Moreover, although there is a cost, a broker can save you money. By negotiating rates and conditions, a broker can help you save on your loan application!
Generally, a broker secures a mortgage rate lower than what you could have negotiated on your own. They negotiate the best loan conditions for you, from the interest rate to borrower's insurance, including processing fees and guarantees.
Lastly, using a broker can save you from stress: as an expert in their field, they know how to make a file attractive and clear, thus improving your chances of obtaining a loan! They present your project to the most targeted banks, thereby enhancing your chances of success.
Most of the time, brokers are compensated in three ways:
These fees are set before the application and are due once the loan is secured.
Brokers also receive payments from the bank as business contributors. They generally earn a percentage of the loan amount (between 0.5% and 0.8% of the financing) which is capped.
Our first piece of advice is to start looking for a broker before you find your house: they will help you define your borrowing capacity and thus allow you to better establish your budget! Moreover, with the process already underway, the financing request period will be shorter.
There is no need to accumulate brokers, as it is counterproductive since the bank cannot entertain multiple brokers for the same financing.
As a foreign investor, it might be more challenging to secure a loan from French banks on your own: a broker is then highly recommended! They will reassure the banks and make your profile more attractive!
Hiring a broker during your property purchasing process has a cost, but offers significant benefits! Often, the money they save you by negotiating the loan even pays for their fees, thus saving you time and peace of mind.
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