June 20, 2019 Are you wondering if you need the services of a financial advisor or what do such people actually do? Is it worth it? We consider all the pros and cons. The matter is not simple – this profession is subject to a number of laws and regulations, and mortgage advisors do not always act solely in the interest of the client. That is why, before using such services, find out what it is all about.
What exactly does a credit counselor do?
The task of a credit advisor is to help the client obtain the most advantageous and tailored loan. He can do it because he has more experience than a regular customer – after all, it’s his job. He knows all the secrets of negotiations with financial institutions and will present the offer of several banks at once. Mortgage advisors know how much a loan costs and how much money you have to earn to get a mortgage.
A loan broker is a person legally defined by the Civil Code. It is an entrepreneur other than the lender, who in the scope of his business or professional activity obtains financial benefits, in particular remuneration from the consumer,
performing actual or legal activities related to the preparation, offering or conclusion of a credit agreement.
The agent’s obligations to the client are the same or even greater than those of the bank. All intermediaries must be entered in the PFSA’s register and not be punished for financial crimes. Even greater restrictions apply to mortgage brokers. They are limited by the Act on Mortgage and Supervision of Brokers, brokers of March 23, 2017.
Such mortgage brokers must undergo a special examination by the Polish Financial Supervision Authority. And why are they usually called brokers or credit experts and not advisers? Well, it is also regulated by law. If the bank pays for the assistance in obtaining the service, or if the broker is directly related to the lender, the broker cannot be called a credit counselor. Hence the name of the expert or credit intermediary.
What does a credit counselor earn from?
If the broker collects money directly from the client and his remuneration is specified separately in the contract, he may be called a credit counselor and may even use the term ‘independent credit counselor’ in the ad. This is a smart legislator’s procedure that credit brokers have widely complained about. It can be expected that more loyalty is shown to the person who actually pays us – thanks to this, independent advisers work for the benefit of the client, not the bank.
Credit experts are required to disclose how much they earn from the brokerage service. The Mortgage Act makes it impossible to earn credit advisers for additional credit products, such as insurance or a credit card for your account.
We know how much credit advisors earn. There are rates around even several thousand zlotys per month. So maybe their work is really valuable and needed? Despite the fact that mortgage advisors value their work highly, their services can pay off. The cost of a mortgage is even over 100,000. zlotys so every fraction of a percentage removed from interest means considerable savings.
Credit advisor, mortgage advisor – is it worth using their services?
There is no clear answer to this question – it depends. Among individual customers, this service usually applies to a mortgage, which is extremely time consuming. An ordinary cash loan can be obtained without any problems in just a few minutes, and therefore the brokerage service in his case does not make much sense. Unless we want to get an offer from several banks at once – in this case it is worth using the services of financial intermediaries or online loan comparison websites.
The situation is different with mortgage loans. Collecting documentation and other procedures necessary to apply for such a loan may take (assuming simultaneous full-time work) even several months. A good credit counselor therefore saves a lot of time and nerves. If you devote enough time to credit then you will probably achieve a result similar to an adviser. The question is, is your time worth it?
Opinions about credit advisors – how to check them?
Despite having to pass the exam from the Polish Financial Supervision Authority, with advisors it is like with any profession – there are better and worse representatives. That is why it is always worth checking opinions about mortgage advisers or credit intermediaries.
It’s best done by friends. If this is not possible, check the opinions of a credit intermediary online. Such opinions can be found on online forums. Do not check only one broker, compare at least several of them.
A reliable banking adviser will regularly inform you about the progress of his work. If you have doubts, you can call the bank and find out if your loan application has been submitted, or check this information in the BIK.
This profession, unfortunately, creates a large field for abuse. The larger the loan is arranged by the broker, the higher the commission he will get. Banks do not offer equal commission for acquiring a client, so a mortgage adviser may try to prefer one bank over another, which is more favorable. That is why it is so important to check the opinions of a credit counselor online. The Act imposes on intermediaries an obligation to inform about which institutions they cooperate with and what commission they will receive for a given product, so this problem has been partly eliminated.
Financial advisor and financial intermediary
A financial intermediary can be a legal person – a company, or even a website. There are quite a few such online credit advisors – they are e.g. loan and credit aggregators.
However, a financial advisor must be a natural person, that is to say, simply a single person. A financial advisor is not only a credit advisor – he can also be, for example, an investment advisor or help you get out of debt.
Real Estate Advisor – what he does
Just like financial advisers, there are also real estate advisors, except that this profession is not so heavily regulated by law. Finding the perfect mortgage is difficult and time consuming, it is no different with an ideal apartment. A real estate advisor will thoroughly assess your client’s financial capacity and will find real estate for him, saving him a lot of time.
A credit broker should also be an expert on the real estate market in your city, regardless of whether it is a credit advisor from cities such as Warsaw, Wrocław, Kraków, Poznań or smaller towns.
These advisers often work with mortgage advisers to maximize the savings in time and resources. How much effort it costs to find an apartment and arrange a mortgage alone can be confirmed only by people who have done it themselves. Suffice it to say that finding one flat and arranging one loan per month is a good result for a loan and real estate advisor.