Carried out in 2011 by Fine Bank Group, the study on intermediation of mortgage loans in Europe shows that the new credit brokerage regulations favor its use by individuals. In France, the market share of brokers in the distribution of credit increased from 15% in 2006 to more than 22% in 2010. Or an increase of more than 46% in 5 years.
Save on your loan with credit brokers
In France, borrowers have now perfectly understood the advantage of using the services of a credit broker to optimize their financing. It should be remembered that mortgage loans often constitute the 1st budgetary burden for owner households. It is a product for which we do not commit lightly. Repayments are made on average over a little less than 18 years and they represent nearly 3.8 years of income of the borrower. In this context and given the increasing complexity of banking offers, individuals have every interest in taking advantage of the expertise of credit brokers.
Especially since, as Mr Peter Velbet, director and creator of the Lite Credit network recalls, “The broker worksin the interest of borrowers. The client does not take any financial risk by using the services of the broker since the latter will be paid if and only if the loan is accepted and always after the current release of funds. “To illustrate his point, Mr. Peter Velbet also recalls that” the broker’s fees are relatively low, around 1% of the amount of the credit and this sum is integrated into the amount financed to be smoothed over its duration. For example, for a loan of $ 100,000 over 20 years, the broker’s remuneration represents 4.16 dollars per month and only 400 dollars if the property is sold after 8 years.This investment in the broker’s service will be very largely recovered by a negotiation of 0. 50% on the rate making it possible to save 6,462.08 dollars on the overall cost of the credit and a reduction of 0. 10% on the insurance which will save 2,000 additional dollars or a total of 8,462.08 dollars. “
New regulations that promote broker intermediation
As Mr. Peter Velbet specifies, “The activity of French banking operations intermediaries is now governed by the Banking Regulation Law of October 22, 2010, the promulgation of which is scheduled for the end of this year 2011. Secured by its new provisions consumers are increasingly using definitively professional intermediaries capable of recommending the best comparative choice. “
Among the new measures, the decree will impose, for example, the obligation of 150 hours of enabling training. It should be noted that these provisions have been applied for a long time in the Lite Credit network which provides almost 175 hours of training to all of its franchisees.
The implementation of regulation
It will also strengthen control of the profession. In particular, it will allow the Prudential Supervisory Authority to apply the regulations, thanks to the 80 controllers recruited for this mission. In addition, it will close the doors of the independent agent to many networks having taken the model of the bank mandate signed by the head of the network, since it will henceforth impose that only level 1 sub-mandating is possible.
All these new security provisions reassure borrowers. Combined with the advice and negotiation benefits provided by the broker, they explain why nearly 40% of French households now consult this credit expert when taking out a loan.