The brokerage market for real estate loans is booming. Today, 8% of people who take out a mortgage use the services of a professional mortgage broker, the method is gaining more and more followers.
A lighthouse at night
How can the rise of this new practice be explained in a country where customers are very loyal to their banks? The reason for this change in behavior lies primarily in the development of real estate prices. In addition, the financing offer is very wide-ranging and therefore difficult to understand alone. The use of a mortgage broker therefore not only enables the taking out of a mortgage loan on advantageous terms, it is also associated with advice from an experienced specialist on a very complex topic. It is often the biggest financial project in life. Therefore, it is important not to drive on sight.
Assessment of one’s own purchasing power
Before you start looking for your new home, you must have a clear picture of what type of property is suitable for you. A mortgage broker can assist you in this initial assessment. There are many factors to consider: Credit borrowing capacity should not be confused with purchasing power. So it makes sense to carefully estimate the additional costs (insurance, registration and notary fees), as these amounts must in any case come from your savings and can vary greatly depending on the situation. Depending on your buyer profile, your income, your debt ratio and your willingness to take risks, the broker can therefore determine the maximum amount for your purchase.
Beyond the interest rate
Customers tend too much to focus exclusively on the interest rate. On the other hand, if you occupy the financing structure, in some cases you can reduce the total net loan costs by up to 30%. The task of the mortgage broker california is therefore primarily to reduce existing misunderstandings. Customers have an idea of what kind of financing is possible. For example, they know that they want to take out a loan at a fixed interest rate. However, if they are repaid early, they are threatened with significant contractual penalties, which they could have avoided with a better coordinated financing structure. So if you take the time to precisely define the basic features of your real estate project and life plan, you will get the best possible offer. Therefore, it is important to weigh up the different scenarios to determine what would happen if interest rates rise or if you sold in 4 years.
The art of tax deduction
Interest on loans for the acquisition of the main residence is tax deductible, as are insurance costs. This advantage can lead to significant savings if handled correctly. For example, if you decide to pay the insurance of your mortgage in a single premium, you can save up to 40% of the total premium in taxes. However, these rements cannot be made with paper and pencil.
What are the advantages of going to a mortgage broker?
- You will receive several offers with just one appointment.
You no longer have to visit the different banks to compare offers, saving valuable time.
- You benefit from better conditions.
A broker represents a significant volume of potential clients for a bank. Therefore, the banks addressed are more inclined to grant better conditions than with a private individual. In addition, the requests are processed by a special department in the bank’s head office, which facilitates the process.
- You will receive your loan offers in just a few days.
Because a special team can answer you faster. You will receive the various loan proposals in an average of three days.
- You have access to all types of credit.
Some banks offer loan terms of up to 35 or 40 years. Others only offer a kind of rate. By querying most banks at the same time, you have the full range of possibilities at your disposal.
- It’s free.
The mortgage broker receives remuneration from the bank, where you ultimately take out the loan. If you do not take advantage of any of the offers, the broker will not receive payment. So you don’t make any commitment. You save time and money without any financial effort.