The mortgage broker: a still unknown topic in Luxembourg

On the occasion of the launch of its new brokerage service in Luxembourg, CREDITSIMMO.LU presents its new blog. Georges Spanier, founder of CREDITSIMMO.LU and with over 30 years of experience in the market, explains the advantages of mortgage brokerage. Most people are not well aware of the work of a broker. They may have heard of it in neighboring countries, where the broker has a more or less good reputation. Of course it is a question of trust. Real estate brokerage in Luxembourg is relatively new, and as with anything new, people tend to be cautious, especially when it comes to their wallets. But rest assured that the mortgage broker can offer you many benefits without taking any risks.



The definition of a broker


A "broker" is a businessperson who engages in an activity known as "brokering" and whose job is to bring together two or more people who want to make transactions such as buying or selling goods, entering into a contract, or signing an agreement.

Thus, a broker can be an insurance broker, a construction broker, a loan repurchase broker or, as in our case, a mortgage broker. The mortgage broker in Luxembourg is a financing professional authorized by the Commission de Surveillance du Secteur Financier (CSSF). His job is to find and negotiate the best credit conditions, the financing solution that best suits the customer's needs and to his financial possibilities. His experience, his knowledge of the market, his professional network and, of course, his banking partners are valuable aids in this process.



I have my own bank, so why should I use a broker?


This is a fair question, because you are a loyal customer of your bank, perhaps for generations. But is that still enough to negotiate the best terms today? Probably not! The banks' requirements for preparing your loan application are more complex and, above all, more elaborate than ever before. If you want to compare the offers of different banks yourself, you will quickly reach your limits. The broker will save you a lot of time and money. He knows the internal guidelines of the bank and how to build your loan request in order to achieve a loan approval. The broker submits a large number of loan applications to the banks, which are well prepared and can pass the credit committee, which is why his documents generally carry more weight than those of an individual.

With his banking partners, the broker guarantees the quality of the dossier and the solvency of his client after carrying out his feasibility study. No one can negotiate and, if necessary, argue as well as a professional broker like us.




How much are the brokerage fees?


As a rule, a service, especially when provided by a broker, is subject to a fee. In the case of CREDITSIMMO.LU, we are particularly proud of the fact that we have managed to negotiate contracts with our banking partners in such a way that our services are not charged to clients. However, in some exceptional cases we have to charge a moderate processing fee.


How is the mortgage broker remunerated?


This depends to some extent on the type of brokerage services offered. In the field of mortgage brokerage, there are three formulas in Luxembourg: The amount of the fees often depends on the broker's negotiation skills, but also on the good quality of his documentation, and so you often hear that the broker works "for free" or that the broker is compensated by both the bank and his client.


To understand this better, you first need to know how a broker is paid. As a rule, the broker negotiates a brokerage commission with his partners. In practice, this is an upwardly capped percentage of the loan amount. In this way, the bank compensates not only a new client, but also the preparation of the file and the loan application. This saves the bank time, personnel and money, which it partly passes on to the broker.


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


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