What is a mortgage advisor?
A mortgage advisor (officially, an Immobiliendarlehensvermittler, but more commonly referred to as a Hypothekenberater in Germany) is a financial professional who helps someone buying a house compare mortgage options. Advisors help you to analyse your financial situation, calculate exactly how much you can afford, and recommend mortgage products from lending institutions. Mortgage advisors are sometimes also called mortgage brokers.
If and when you decide to apply for a mortgage, they communicate with the lender on your behalf and provide support until a mortgage offer is issued.
Mortgage advisors typically help with:
- Understanding how much you can afford and how high a mortgage you might qualify for
- Comparing different mortgage products, rates and lenders
- Explaining mortgage structures and fixed-rate options
- Helping you to put a mortgage application together, including collecting the right documentation
- Liaising with lenders on your behalf during the application process
There are different types of mortgage advisors that you might come across:
Independent mortgage advisors
Most mortgage advisors are independent. That means they work independently, rather than for a single lender, and can help you compare multiple different options from different lenders. Working with an independent mortgage advisor is usually the best way to ensure you are getting the best possible deal.
Some mortgage lenders, however, are not independent. They are known as “tied advisors”. They are restricted to recommending products from a single lender (like an individual bank) or from a limited number of lenders. The benefit of working with a tied lender is that they sometimes have access to special offers or exclusive rates, and can offer a quicker, more streamlined process if you are in a hurry.
Specialist advisors
Some mortgage advisors also specialise in certain types of property sales or clients. For instance, you might find mortgage advisors that specialise in buy-to-let mortgages, or helping first-time buyers. All of the advisors listed above specialise in helping expats in Germany get mortgages, so you can rest assured that they will be able to help in your situation.
How much does a mortgage advisor cost in Germany?
Many mortgage advisors in Germany offer their services for free. This is because they collect commission from the lender you choose. That means you can get the mortgage advisor’s expert advice at no cost to yourself.
You may come across mortgage advisors who charge for their services, but this is not the norm and might be a red flag that something is amiss.
How to pick a mortgage advisor
If you are struggling to choose a mortgage advisor, it’s worth considering the following factors:
- Word-of-mouth recommendations: Speak to your friends, family and colleagues, to see if they have anybody they would recommend. It’s also worth checking reviews and client testimonials.
- Independence and lender access: Check how many lenders the mortgage advisor works with. The more choice, the more chances you have of finding a better deal. However, a mortgage advisor with direct access to a single lender might offer a more express service.
- Regulatory compliance: All mortgage advisors in Germany need to pass exams and be accredited by the IHK (Industrie und Handelskammer). Ensure that your chosen advisor is accredited, verified with an IHK number.
- Experience: Ensure that your chosen mortgage advisor has experience with other buyers like you.
- Fees and commission: It’s worth also making sure that you understand exactly how your chosen broker makes money. They should be transparent about their fees and compensation arrangements with lenders.
Is it better to go through the bank or a mortgage broker?
Both banks and mortgage brokers offer mortgage financing in Germany, but they serve different roles.
Going directly through a bank
Applying for a mortgage directly with your own bank may give you access to exclusive rates and products not available to the general product. This might be a suitable approach if you already have a strong relationship with your bank, or need to get a mortgage quickly. However, going directly to your bank might mean the entire process is conducted in German, so you will need a good understanding of how mortgages work in Germany.
Using a mortgage broker or advisor
Independent mortgage advisors compare mortgage products from multiple lenders. This normally means you have access to more competitive interest rates or flexible terms. Brokers can also assist with paperwork, negotiations, and navigating complex financing scenarios.
You might see this as a particular bonus if you are unfamiliar with German customs or do not speak German fluently. Many borrowers in Germany choose mortgage brokers because they can simplify the mortgage process and provide access to a wider range of lenders.