Are you considering buying a home and don’t know where to start? A mortgage broker may be the solution you are looking for. But what is a mortgage broker and is it really useful to hire one? In this article we will explore the definition of a mortgage broker, discuss whether it is worth hiring, identify its advantages and disadvantages, and answer the question about how much it costs. With the information presented here, you will be able to make an informed decision about whether it is the best option for your needs.
What is a mortgage broker?
A mortgage broker is an independent professional who specializes in searching for and managing mortgages. In addition to serving as an intermediary between the financial institution and the person requesting the loan, it also has the function of advising clients on the credit that is best for them and on any questions that arise during the process.
For this, mortgage brokers are in continuous training and updated on any developments in the banking field. In addition, to work as a mortgage adviser or real estate credit intermediary, you must be registered with the Bank of Spain, obtain a minimum accredited training and follow a code of ethics, transparency and good practices towards its clients.
To get a good mortgage it is no longer necessary to visit dozens of banks and negotiate with each one, real estate brokers are able to get mortgage loans with better benefits, such as lower interest rates and even 100% financing.
Is it worth hiring a mortgage broker?
Buying a house is one of the most important decisions of your life, and getting and getting the best mortgage credit is quite an odyssey.
If you do not have experience, seeking advice from experts in the area can be interesting.
The job of a mortgage broker is to serve as an intermediary between the client, in this case you, and the banking entities. After studying your financial needs and which bank can best cover them, they will present you with the mortgages that best suit your financial requirements.
Now that you know what a mortgage broker is and its advantages, it is time to tell you some more, among which we highlight the following:
- The mortgage broker has agreements with the most important banks in the country, so it has the possibility of offering you different mortgage loans and assessing different offers. By analyzing and comparing the variety of offers in one place, you will save a lot of time.
- Real estate brokers have developed high bargaining power. This allows them to negotiate the conditions of the mortgages to favor those interested.
- Thanks to their knowledge and negotiation skills, a mortgage broker is more likely to obtain mortgages that finance more than 80% of the value of the property.
- To buy a house it is necessary to have at least 30% of its value. If you don’t have it, a broker could negotiate for you to get the mortgage without these savings. Of course, you must have a good economic profile.
- A broker accompanies you throughout the entire process, from the beginning of the search, going through the procedures and paperwork, until the moment of signing.
Will the price of new construction homes in Valladolid go up?
There are not many disadvantages of contracting your mortgage through a broker, but you should be aware of some disadvantages:
- Not all brokers work with all banking entities, so it becomes a problem if your objective, before contracting your mortgage, is for the broker to provide you with proposals from all entities.
- Like any service, involves an expense. It is usually included in the financing, but you must be aware of the details. We indicate them below.
How much does a mortgage broker cost in Spain?
The fees may be different depending on the fees applied by each broker. Some charge a percentage commission that oscillates between 1% and 5% on the amount of the signed mortgage; Others ask for a fixed amount that is usually between 3,000 and 5,000 euros.
The average fixed interest that banks offer to those who request a mortgage is around 1.50%, while the average variable rate is around euribor plus 1%. Through a broker, on the other hand, it is possible to get a fixed rate of about 1% or a variable rate on the euribor plus 0.60%.
These fees are paid solely and exclusively if a mortgage obtained by the broker is contracted. But be careful, you cannot reject an offer and immediately sign the loan with the bank that issued it: if you do, you will have to pay the broker’s fees plus the penalty established in the brokerage contract.
Below we leave you a YouTube video of the channel “Grocasa” where they discuss the current mortgage situation in our country:
As little as the broker gets us a mortgage with better interest rates, we will save and more than amortize the fees that it will cost us when signing the mortgage. On the other hand, if we sign a bad mortgage, we can be paying (literally) the consequences for many years.
The fact that the best mortgage brokers only charge fees if we decide to sign the mortgage that they present to us is, in a way, an excellent guarantee that they will search and search for the best mortgages according to our profile.
If we do not end up signing the mortgage, they do not charge. And if we end up signing, it means that both parties have benefited.
If you are looking for a home in Valladolid, do not hesitate to visit the available properties in the area.