Article by Marlon-Yves Nadler, Managing Director of FIDEM SA.
What is a credit broker?
A credit broker is a service provider that refers consumers to lending institutions and banks. Their mission is to assist you in finding a suitable instalment loan for your financing needs.
Your need for these services arises from the number of banking products and credit offers on the market. The main difficulty is to keep a comprehensive overview of this diversity. However, the credit intermediary takes care of this for you.
Professional advice: At the time of your loan capacity analysis and before submitting your loan request to credit institutions, a loan broker must consider which instalment amount you can afford and what term is acceptable to you.
More than one bank: A credit advisor must work with various partnering banks, and submits your loan request to them. To do this, the service provider prepares your loan application, reflects your life plans and the necessary details about your personal & financial situations, and the desired loan amount calculated together.
Tailor-made service: A credit broker can do a lot for you. They advise you, have contacts to the credit institutions and know where to find the most favourable conditions for your financing. They will also show you which terms, instalment amounts and repayment duration they consider the most advisable according to your profile.
Save Time and Effort: A credit broker directly communicates with each bank credit decision-maker. Each bank specific risk assessment rules are taken into account before submitting your loan application. A credit broker has the professional expertise to prepare and document this loan request at best. It is only done once and jointly with each client.
Competitive interest rates: Because loan brokers have access to a wide variety of lenders, they can negotiate favourable interest rates on your behalf. They can help you save money in the long run by finding the best interest rates for your financing. The banks issue a loan proposal with their best conditions, as they know that a broker also puts them in competition with other banks.
You have the last word: The Broker must explain transparently the differences of the available offers to you. Once the comparison of these offers is clear to you, you can then decide whether and which ones to accept.
If difficult circumstances should stand in the way of obtaining a credit, the broker can often still reach success in the personal discussion with the bank representatives. Furthermore, the credit intermediary ensures a fast-tracked analysis of your application. They know how to optimally prepare the loan application and avoid delays in its confirmation. Thus, the loan broker offers you numerous valuable services for your real estate financing.
Without the intermediation of a mortgage broker, here are the time-consuming steps to go through by yourself:
- preparing your loan request documentation
- clarifying your needs
- setting meetings with the local banks
- understanding their available products
- distinguishing the benefits and the risks,
- following up each request with each bank
- completing documentation specifically to each bank requirements.
Once you have reached the step of obtaining several banks offers by yourself, it is now time to make your calculations, so you can compare one to the others, and make some leverages to eventually renegotiate relevant offers.
And remember that it should be done within the timeframe set by your “compromis” (sales agreement), so as not to lose your real estate project with potential penalties.
How do we do it at FIDEM?
When it comes to buying a home, the right loan must match your life plans and one of the keys is a comfortable monthly payment for the household. We pay as much attention to your home financing conditions than to your expected flexibility along your future projects. With so many ways to structure a home credit, it has never been so difficult to obtain the best financing fitting your living situation and your goals and desires, as ever.
We consider interest rates as the tip of the iceberg of a loan contract and its structuration – security vs flexibility vs protection – is the invisible part, but also the most important during the loan lifecycle.
As independent mortgage brokers, FIDEM is on the side of its clients to represent their interests to the banks. Our recommendations are not influenced by the credit institutions’ interest.
After contacting FIDEM, you will have a dedicated contact person that will guide throughout the full loan process.
If you have not identified a real estate project yet, FIDEM will provide you with an assessment of your borrowing capacity by establishing your personal cashflow situation and the financial plan of the project.
If you start or are already in active search mode, FIDEM will provide you with a buyer certificate confirming your borrowing capacity for your offer for the seller or the real estate agent.
This certificate demonstrates your solvability, makes you a step ahead over the other potential buyers, and often leads to a successful “Compromis”.
When you have signed the compromis, FIDEM collects all the necessary documents and prepares your loan request for submission to credit institutions.
After receiving their offers, FIDEM identifies the relevant conditions from each proposal, makes transparent recommendations according to your preferences, and then you know why your loan contract is the best solution for home financing.