By knowing how to choose a French mortgage broker you can save yourself time and a lot of money.
Understanding how to choose a mortgage broker is the first step to getting a good value, trouble free mortgage.
The French financial services industry operates differently from that in most countries. So, knowing how to choose a French mortgage broker is vital to getting a good deal.
Choosing the wrong broker can increase your costs by up to 3.5% of the cost of the mortgage. This can amount to a staggering €3,500 on a €100,000 mortgage.
How To Choose a French Mortgage Broker
In France, all banks pay a small commission to the broker that introduces a new client to them. The bank commission will be between 0.75% to 1.5% of the mortgage value, usually capped at below €15,000. You cannot get a cheaper mortgage rate by going directly to a bank. Often, special offers and negotiated conditions are only available through the broking market.
Unfortunately, many French brokers charge their clients arrangement fees. These arrangement fees usually combine two separate charges. A non-refundable “dossier” fee, to read the application, and a “success” fee. These arrangement fees are often higher than paid by French borrowers, supposedly to pay for bilingual broking staff.
In the worst cases brokers charge an additional dossier fee, typically between €250 to €500, and many will expect an additional success fee of up to 3% of the mortgage value. An unscrupulous broker will pocket up to 5% commission – 3.5% from the client and 1.5% from the bank! Because we run very efficiently we offer you an exemplary personal service without any additional fees.
In the French market, which has relatively few mortgage lenders, the greatest added value of the broker is to provide you with an exemplary, professional service that speeds and eases the French banks mortgage application process.
What to Look For
Only shop around to help you decide which broker will do the best job for you.
Never go to a fee charging mortgage broker first. Particularly avoid those that require an up-front non-refundable fee to tell you that they can’t get you a mortgage. Remember, if you first go to a fee charging broker you prevent a no fee broker from using any bank which has already been approached with your mortgage application.
The best strategy is to go to a reputable no fees broker with whom you feel comfortable and in whom you have confidence. The truth is that, in France, the average mortgage takes around 14 weeks form application to receipt of the funds by the Notaire. Therefore, you should choose a broker you can work with as the application progresses. Don’t fall for the one with the glibbest sales pitch!
You should also be aware that all offshore mortgage brokers are unregulated, though some may seek to pass themselves off as being “regulated” in another context. For example a mortgage broker who is regulated to undertake UK mortgage business is completely unregulated for France. However, you can check on regulation in regulated areas such mortgage life insurance: See our UK Prudential Regulatory Authority Registration.
The best guarantee of broker quality is reputation, justified by references if requested,
Finally, our advice is that you should be very sure that you are working with a reputable professional broker. One with a personal depth of financial sector experience and who is genuinely working in your best interests.
How to Choose a Mortgage Broker Checklist.
- High quality individual personal service – You should have a nominated single individual who deals with all aspects of your mortgage and in whom you have complete confidence.
- In depth knowledge of French property and the French property market – You should expect your mortgage broker to be a mine of useful information.
- Client focus – You should expect the mortgage broker to be working for you, not working to maximise their sales commission. If in doubt just ask them straight out.
- Professional knowledge and competence – Are you dealing with a dedicated professional, a commission only salesperson or a faceless call centre?
- Experience – Always ask your mortgage broker how long they have been arranging French mortgages. Also, remember to ask what they did before they were a French mortgage broker.
- Honesty – The broker should offer the best mortgage product for you not for their commission.
- Value for Money – No brokerage fee, no arrangement fee, no success fee and no hidden charges.