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The mortgage broker: an unusual subject in Luxembourg

Updated: Jul 5, 2021

The mortgage broker: an uncommon subject in Luxembourg For the launch of its new brokerage service in Luxembourg, CREDITSIMMO.LU presents its new blog. Georges Spanier, with 30 years of experience in the market and founder of CREDITSIMMO.LU, explains the advantages of mortgage brokerage. For most people, the work of a broker is not well known. It has been heard of in neighbouring countries and the subject enjoys a more or less good reputation. Of course, it is a matter of trust. Real estate brokerage in Luxembourg is relatively new, and as with anything new, people tend to be wary, especially when it comes to their wallet. But rest assured, the mortgage broker offers you many advantages without any risk to you.

The definition of a broker

A "broker" is a business professional who carries out the activity called "brokerage", and whose role is to bring together two or more persons seeking to carry out transactions such as the purchase or sale of goods, the conclusion of a contract or the signing of a contract.

A broker can therefore be an insurance broker, a property broker or, as in our case, a mortgage broker/repurchase loan broker. The mortgage broker in Luxembourg is a financing professional approved by the Commission de Surveillance du Secteur Financier (CSSF). His job is to find the best credit conditions for you, the financing solution best suited to your needs and your financial possibilities. His experience, his knowledge of the market, his professional network and, of course, his banking partners are precious aids in this process.

I already have my own bank, so why should I use the services of a broker?

This question is justified, as you are a loyal customer of your bank, perhaps for generations. But is this enough to negotiate the best terms? The bank's requirements for preparing your credit file are more complex than ever, and above all, more onerous. If you want to compare offers from different banks yourself, you will quickly reach your limits. The broker will save you a lot of time and money. He knows the bank's internal policy and how to prepare your credit file in order to obtain a credit agreement. The broker presents a large number of credit applications, well prepared and ready to pass the credit committee, why his files generally carry more weight than those of private individuals.

With his banking partners, the broker, after having carried out his feasibility study, guarantees the quality of the file and the solvency of his client. No one will be able to negotiate and, if necessary, argue a case like someone who calls himself a professional.

How much is the brokerage fee?

As a general rule, a service, especially one provided by a broker, is not free of charge. In the case of CREDITSIMMO.LU, we are particularly proud of the fact that we have been able to negotiate contracts with our banking partners in such a way that our services are not charged to the client. In some exceptional cases, however, we have to charge a moderate handling fee.

How is the mortgage broker remunerated?

It must be said that this depends somewhat on the type of brokerage offered. In the field of mortgage brokerage, there are 3 formulas in Luxembourg: the amount of the fees often depends on the negotiating skills of the broker, but also on the good quality of his files and so you will often hear that the broker works "free of charge", or the broker is remunerated both by the bank and by his client.

To better understand this, you first need to know how a broker is paid. As a rule, the broker negotiates a brokerage commission with his partners. This is usually a percentage of the loan amount that is limited upwards. In this way, the bank is not only compensating a new customer but also the preparation of the file and the loan application. This saves the bank time, staff and money, which it will pass on in part to the broker.

Brokerage has undoubtedly acquired a well-deserved status in Luxembourg. Using a professional broker is a legitimate way to save time and money.

Trust our knowledge and skills, our expertise and our services. Ask for your personal consultation appointment now.


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