Mortgage brokers - What are they and why use these services?

What are credit intermediaries?

Credit intermediaries are individuals or companies that are part of the credit granting process, acting as a bridge between the consumer and the banking institutions that provide the credit. These intermediaries may present credit proposals, assist consumers in preparing and organizing the necessary documentation for a credit application, sign credit contracts on behalf of banking institutions, or provide assistance and consultancy to consumers by making recommendations. Attention! Credit intermediaries do not grant credit. Even when they are involved in the mediation process of a credit, the decision-making process for granting credit belongs solely to the bank (or credit institution) that grants it. These intermediaries also cannot market other banking products and services such as account openings or term deposits.

What are the advantages of using the services of a credit intermediary?

A credit request is a process that can be lengthy and requires patience, time, and availability. It becomes even more stressful when major life decisions, such as buying a home, starting a business, or fulfilling a personal dream, depend on its approval. This is where a credit intermediary can be beneficial. Let's see what advantages there are for you in using these services:

• Credit application preparation: A credit intermediary knows exactly which documents should be presented for a credit application and how to easily obtain them, being able to guide and assist you in this collection and organization.
• Save time: To obtain a credit that benefits you financially, it is not enough to contact your usual bank. It generally involves contacting several banking institutions and credit institutions to obtain multiple proposals. This is a process that can be time-consuming and involve several contacts or even trips to bank branches. A credit intermediary does this work for you! With all the necessary documentation, an intermediary contacts financial institutions and requests credit simulations and proposals, so that you can analyze the best proposal for you.
• Save money: Credit intermediaries have privileged relationships with banking institutions, so not only is the process faster, but they also have access to more advantageous credit proposals for you.
• It is a free service: Credit intermediation services have no cost to you, the client (we will talk more about this in this article!).

Although it is not a rule when it comes to credit intermediaries, a good professional will also have a lot of experience in the area, good knowledge of the financial institutions with which he works and what the market trends are, being able to act as a guide in the decision-making of his clients.

In Poupança no Minuto, your dedicated agent will follow your process from start to finish, starting with an analysis of your goals and financial situation. There is no credit that is good for everyone - depending on your personal and professional situation, you will see benefits in different things. Those investing in their business may want to quickly pay off their loan, while those starting a family may prefer a low monthly installment that allows for safe management of the family budget and savings for the future. Your Poupança no Minuto agent will take all of this into account and seek the best opportunities for you in the right places.

Are the services of a credit intermediary paid for?

For you, the customer, the services of a credit intermediary are free! This is because most credit intermediaries are paid by the banking institutions with which they have partnerships, and for whom intermediaries are a source of new customers. It is a mutually beneficial relationship: intermediaries can partner with various banks and propose to their customers more advantageous credit contracts for each specific situation; while banks do not need to allocate manpower to customer acquisition.

It also makes sense to understand that there are several types of credit intermediaries:

Tied credit intermediary: It is an intermediary that is tied to one or more banking institutions, from which it receives a commission when it signs a credit contract.

Accessory credit intermediary: Here we are referring to retailers or service providers who, in partnership with a banking institution, mediate credits for the acquisition of their products or services. Have you ever been to a large retail store where they offer the possibility of buying appliances on credit? Or a car dealership that also handles the credit for the purchase of the car? That's what we're talking about.

Non-tied credit intermediary: It is an intermediary that is not linked to any financial institution. This is the only type of intermediary that may charge you for their consulting and mediation services. These intermediaries can call themselves "independent intermediaries or consultants" and must always enter into an intermediation contract with the consumer, in which the terms and conditions of the services provision are established.

Care to take when hiring these services

When it comes to credit fraud, caution is essential. It is not something new, but it tends to spread, especially through social networks, in times of approaching economic difficulties or increasing interest rates. Here are some simple tips to protect yourself from these types of fraud:

• Pay attention to the approach: in scams, a direct and aggressive approach through social networks is common, promising easy or guaranteed credit. A credit intermediary does not actually grant credit or guarantee it, so you should be suspicious of this type of approach.
• Don't advance money: a credit intermediary will not request advance money in order to "unlock" the credit approval.
• Validate the credibility of the intermediary: all authorized credit intermediaries are registered with the Bank of Portugal. Through this website you can search and validate the mediating entity.
• Validate the banking entities to which the mediator is linked: On the same page of the Bank of Portugal you can also see to which banking entities the intermediary is linked.
• Always ask for the IPN/IPN: The Standardized Information Sheet for Credit (IPN) is a document issued by the bank that presents the main characteristics of the credit and pre-contractual information, allowing you to know all the conditions of the credit and confirm its legitimacy.  

There is no doubt that obtaining credit for your projects can be a long and demanding process. Now that you know all about credit intermediaries, you can decide if this is the ideal service for you!