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What is a financial intermediary or broker?

If you are looking for a mortgage, surely you have heard of the financial intermediary or broker. This is a professional who is in charge of searching for the best mortgages and negotiating preferential conditions adjusted to the profile of each client. They can work independently, with agencies, or linked to real estate agencies and online financial comparators.

There are free brokers and others that charge fees. Usually, the latter depends on two factors: needing a mortgage loan above 80% (the most complicated mortgage to obtain) and looking for complete support because you do not understand much about getting the best possible mortgage. In other words: if you hire a payment intermediary, be clear that you are paying for a service and, therefore, you have the right to demand the best customer service. 

Difference between paid and free mortgage broker, advisor, and manager

You need to know that a broker and a mortgage broker are the same things. You will find that some independent agencies and brokers make this distinction when offering their services, but it is more of a marketing issue than anything else.

  • Usually, they will tell you that they are intermediaries when they DO NOT CHARGE for their services but rather receive commissions from the banks with which the client signs the mortgage. This is the case, for example, of Idealista. In general, the work of a free intermediary is reduced to finding the best offers according to the client’s profile. Still, they do not advise or specialize in obtaining more mortgage loans than the usual 80%. Of course, there are exceptions, such as iAhorro, which negotiates mortgages of up to 90% at no cost to the user.
  • Instead, they will tell you they are brokers when they DO CHARGE for their services, like Housfy or RN. Unlike the free ones, they not only search for and negotiate the best-personalized offers but also offer comprehensive support until (usually) the signing of the mortgage contract. Payment brokers are specialized in obtaining complicated mortgage loans of up to 100% financing, either because you do not have enough savings or because your financial profile is not so good. They also charge commissions from banks.

As for the mortgage advisor, as his name suggests, he is in charge of advising you on which mortgage is the best for you. Payment brokers usually include this advisory function among their services and guide you through the mortgage offers they get for you to understand your options well and choose the one that best suits your situation. The mortgage manager focuses on speeding up procedures with the bank and delivering documentation.

Is it safe to hire a broker?

Suppose you’re wondering if it’s safe to take out a mortgage with a mortgage broker, yes. Whether they charge or not, to carry out their work, they must be registered in the Bank of Spain’s register of credit intermediaries and are subject to supervision. 

Currently, there are about 400 registered professionals. In our country, they are regulated by Law 2/2009, of March 31 (which governs the contracting with consumers of mortgage loans or credits and intermediation services for the conclusion of loan or credit contracts) and Law 5/2019, March 15, regulating real estate credit contracts.

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