Do I owe money to a broker I worked with if I don’t get mortgage? With rising rates, is it really worth going through a broker? MoneyVox answers borrowers’ most frequently asked questions on the subject.
For the past few weeks, taking out a mortgage with a bank has sometimes been an obstacle course. To deal with these pitfalls, some borrowers choose to turn to a real estate loan broker, while others prefer to approach banking establishments themselves, believing that the interest of the broker is minimal. I have to say that the broker pays himself, approximately 1% of the amount borrowed with eventual floors and ceilings. The MoneyVox editorial team has gone around its forum in an attempt to answer the main questions and misconceptions concerning this profession.
1-It is better to go to your bank than to go through a broker to save money
Faced with the rise in real estate rates and the reluctance of banks to grant a loan, more and more borrowers are trying to reason to lower the cost of their credit. One of the solutions would then be to do without a broker, in order to save several hundred euros. But these savings cannot be made only by having a good knowledge of the banking environment, assures Ccile Roquelaure, spokesperson for the broker Empruntis: If you have the time and the knowledge, to find out today which banks still agree to make mortgages and what their expectations are, then you can try to obtain financing. without going through a broker. According to her, the negotiation may however be more difficult for a single borrower than for a broker who brings a large number of files to the bank.
Then, it is to be hoped that the solicited bank will still make real estate loans: The situation is such today that more and more banks refuse mortgage applications, even their clients, reveals Mal Bernier, spokesperson for broker Meilleurtaux. Some establishments, which have to borrow the money they lend on the markets, no longer do mortgages for the moment because the latter is too expensive. When you go to see your bank, you have to hope that it still makes credit.
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And even there, there can be unpleasant surprises: Unfortunately, we too often recover borrowers who had received an oral agreement from their bank following a simulation and who are denied credit when they arrive with a compromise, notes Ccile Roquelaure. Either because the bank’s policy has changed in the meantime, or because the complete study of the file had not been done upstream.
2-In the current situation, going through a broker no longer has any interest
Put together a complete file, accompany the borrower until the signature at the notary… The broker’s prerogatives are multiple, assure our interlocutors. More than ever, it is much more than a simple story of rates, assures Mal Bernier. The broker will do everything to optimize the financing, in particular by playing on borrower insurance. Overall, the banks have already achieved their credit production targets for 2022, confirms Sandrine Allonier. Today, the question is no longer to know who has the best rate, but to find a bank ready to finance the credit.
Ccile Roquelaure, for her part, emphasizes the advice part upstream of obtaining a mortgage: Today, embarking on a project with a simple simulation of your bank adviser, is to take a risk, considers the spokesperson for Empruntis. A broker will follow his client from the estimate of the financing envelope, until the signature at the notary, but also make the link between the bank, the notary and the client. A presence that can be reassuring, especially for first-time buyers.
3-Going through a broker will make me exceed the wear rate
3.05% for loans with a term of 20 years or more. The new usury rate, which came into effect on October 1, was supposed to give borrowers some breathing room as the average rate for a loan over 20 years and over exceeded the 2% mark. Maximum rate above which the banks cannot lend, the usury rate includes the nominal rate, the borrower’s insurance but also the administration fees and the broker’s fees. But then, is making these disappear the solution to go below the rate of wear? If the broker is paid for his work, I don’t think that’s what prevents a financing file from being passed, sweeps Ccile Roquelaure. The broker’s cost of all financing is minimal compared to the cost of guarantees or borrower’s insurance. The leeway is elsewhere. And when a penny is missing from a file (0.01 point Editor’s note) to go below the wear rate, both the broker and the banking partner make efforts for the file to pass, and we try to find solutions.
A broker takes fees, which is normal, believes Mal Bernier. But the situation has been such since June that most of the time, when we talk about a file blocked by the wear rate, it is already a file from which broker fees and bank charges have been removed and yet it does not pass. Because indeed, 500 or 1000 euros can sometimes make the difference, even if it is very rarely what blocks financing.
4-Banks no longer want to work with brokers
The 10-year OAT, which serves as a benchmark for banks to set their credit rates, continues to climb, from 0.4% in March 2.83% on October 17. In this context, banks therefore sometimes have great difficulty in taking advantage of real estate loans. To try to free up a margin, banks have therefore announced the temporary suspension of their agreements with brokers so that they no longer have to pay them as business introducers.
Some banks have actually chosen to temporarily put their agreements with brokers on hold, confirms Mal Bernier, who explains, however, that establishments which had made this choice at the start of the summer are taking over files from brokers. As most banks have already achieved their loan production for 2022, these establishments are no longer necessarily looking for real estate loans, adds Sandrine Allonier. That will probably change in November, when the banks will start producing credit that will count for 2023.
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5-Brokers direct customers to the banks that pay them the best
In addition to the fees billed to the client, the broker is sometimes remunerated by the banking establishment as a business introducer. But all those interviewed ensure that this commission has no impact on the establishments contacted when proposing a file. On the contrary, we are sometimes obliged to sign in banks where we do not have a bank commission because this is how we will be able to pass the file, swears Sandrine Allonier. Otherwise we risk losing the customer and we will not even be paid by him.
The broker is mandated by the client, his duty is therefore vis–vis the latter. He must find him the best offer without taking into account any commissions he could receive, judge Ccile Roquelaure. And anyway, the different commissions today are pretty much all the same. A story confirmed by Mal Bernier from Meilleurtaux: The commissions paid by the banks are all around 0.8% of the loan capital, with a ceiling above a certain amount. That is to say that for a loan of one million euros, the broker will not receive a bank commission of 8000 euros.
6-Brokers do not work with online banks
It all depends on the brokers: for example, Empruntis, Meilleurtaux and Vousfinancer explain that they worked with ING until the announcement of the cessation of its activity in France for the end of 2022. Empruntis still works with Fortuneo and Hello bank, while Meilleurtaux can also offer Fortuneo files. In his agency, the broker must normally display a list of the banking establishments with which he is a partner, says Ccile Roquelaure. The opportunity for the borrower to know with whom his file can be presented. On the other hand, Boursorama does not work with brokers. To date, Boursorama believes that its channel of attraction does not depend on brokers, confirms Mal Bernier.
7-Going to see a broker will inevitably cost me money, even if I don’t get my credit
For Sandrine Allonier, the answer is clear: a borrower pays a broker only if the latter has found financing. There is a law that frames a and that says that no sum of money can be claimed before the release of the funds. As long as the file has not been completed, no fees will be charged. Indeed, Article L322-2 of the Consumer Code provides in particular that no payment, of any nature whatsoever, may be required of an individual, before obtaining one or more loans of money. . An idea reinforced by‘article L519-6 of the monetary and financial code. In short: if you sign a fundraising mandate, the broker will be paid once the work is done.
Some brokers now offer consulting services, and support the client by explaining to him what is the best arrangement for his case, but without looking for capital, tempts Ccile Roquelaure. This advice may be charged, but whatever happens, it is clear from the start, there should be no doubts. And while brokerage fees can reach 1% of the amount borrowed, advisory fees are necessarily lower. There is no question of asking for the same amount as for a traditional mandate.
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Real estate credit: price to pay, independence and interest… 7 misconceptions about brokers
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