What is brokerage costs?
As part of a mortgage, brokerage costs include:
Brokerage costs designate the remuneration received by a broker, whether specialized in stock market or mortgage, in exchange for its services. On the stock market, these costs apply during transactions (purchase or sale of shares, bonds, etc.). As part of a loan, they cover the intervention of the broker who negotiates the best conditions with banks.
Management costs for broker
The broker acts as an intermediary professional between a client and a financial institution. Its role is to facilitate the process and optimize costs for its client.
What are the different types of brokerage costs?
Depending on the type of service, brokerage costs can take different forms.
On the stock market, purchase and sale costs
On the stock market, purchase/sale order costs can be:
- fixed in order executed;
- proportional percentage of the amount of the transaction;
- Decreasing according to the monthly volume of shares with a minimum in order.
In mortgage
As part of a mortgage, brokerage costs include:
- Commission paid by the bank.
- Brokerage fees billed to the customer as a file fees (in addition to those collected by the bank and included in the announced TAEG).
- Sometimes a percentage on the loan amount (often around 1 %).
In terms of insurance brokerage
The insurance broker is paid by a commission paid by the insurer. However, he can complement his remuneration with service fees billed directly to the customer:
- file fees;
- Risk management fees;
- Following claims monitoring (this is especially the case with regard to business risks).
In all areas, it is essential to read the general conditions of the broker well to avoid any unpleasant surprises.
What are the other scholarship fees?
In addition to brokerage costs, opening a stock market can generate additional costs.
Account holding fees
Most brokers (or brokers) such as direct scholarship, sax bank, degiro, interactive Brokers, as well as online banks like Fortuneo, do not charge account holding costs. On the other hand, these costs are generally applied by traditional banks.
Title custody fees
Banks invoice the costs of keeping securities to the number of lines and depending on the outstanding December 31.
Inactivity fees
If no transaction is carried out for a while, inactivity costs can be invoiced.
Account transfer fees
If you change your establishment, account transfer fees can be billed by banks for ordinary securities and PEA. They are often reimbursed by the arrival broker in a certain limit.
Exchange fees
Exchange costs are inevitable if you operate on foreign markets. The operator will change your euros against dollar, yen, book-store, Swiss franc, etc., but will take a commission in passing.
Order cancellation fees
In the price brochures of many brokers, we note that orders not executed or canceled are often exempt from costs. Only the costs of execution of the order are invoiced. However, costs or supplements may apply in cases of “extraordinary” service.
Cost of a purchase or sale order
The cost of a purchase or sale order depends above all on the marketplace on which you operate. If you invest in the American or German markets in particular, you will access it at a lower cost through foreign broker platforms.
Delayed Settlement Commission
A deferred settlement commission may be invoiced in the event of the use of the deferred settlement service (SRD). It pays the advance fees of the funds or borrowing of the titles exposed through the intermediary.
Withdrawal or transfer costs
Withdrawal or transfer costs can be collected during the recovery of funds from the PEA or the CTO.
All of these costs may vary sharply depending on the services offered and the establishment’s pricing policy.
What is the amount of brokerage costs?
Prices that vary depending on the type of broker, the volume of transaction and the amount of the mortgage
The amount of brokerage costs depends on the type of broker (online or traditional), the volume of transactions or the amount borrowed in the case of a mortgage.
Costs of each stock exchange
On the stock market, the costs can range from 0.05 % to 1 % of the amount of each transaction.
Capping of brokerage costs for PEA
The PACTE law capped brokerage costs for the PEA at 0.5 % in the event of a dematerialized order and 1.2 % in other cases. But the price remains completely free with regard to the securities account.
Price of a real estate broker
For a mortgage broker, the case fees may vary from 1 to 2 % of the amount borrowed and are often capped at 3,000 euros in total depending on the complexity of the loan request. These intermediation costs are only due in the event of financing the project.
How to avoid or reduce brokerage costs?
Compare the brokerage costs of the different online platforms
Some online platforms or brokers offer very competitive, even free offers for small investors. But if it is advisable to check the services included in the offer, know that “cheap broker” does not mean broker at a discount. Those operating online offer generally lower prices than traditional banks, with innovative services and generally quality customer service.
Study pricing conditions
To optimize your search for financing, here is the good recommended practice:
- Compare the offers and services of several brokers
- Read the pricing conditions carefully
- Favor transparent professionals on their remuneration
- Consult the opinions left by customers to ensure the reliability of the broker
- Negotiate brokerage fees
Do you have to pay a broker to invest in the stock market?
Not necessarily. Some online brokers do not charge any brokerage fees for the first orders or offer very low costs. However, low pricing is often accompanied by a more limited offer of services and sometimes includes hidden costs. Conversely, a traditional broker will charge higher costs, but will provide personalized support, market analyzes, and professional advice. It is up to everyone to choose according to their profile and their needs.
Why call on a real estate broker?
Get better rates and reduced case fees
A mortgage broker is a precious ally to optimize your loan request. Thanks to its network of banking partners, it can negotiate:
- A better rate
- Reduced case fees
- The abolition or fall in certain additional costs.
Save money throughout the duration of the loan
The broker may also take care of finding you a good borrower insurance contract which will allow you to opt for the insurance delegation provided for by law. This advantageously replacing the collective contract more or less imposed by the lending bank. This operation will allow you to save substantial throughout the duration of your loan, which can represent up to 15 or 20,000 euros depending on the capital borrowed and the duration of the loan.
Increase your chances of seeing your mortgage accepted
Finally, the broker’s experience and know-how will allow him to optimize your chances of seeing your request for a loan accepted. Even if this represents a cost, going through a broker can save several thousand euros in total over the duration of the loan. In addition, this prevents you from approaching each bank yourself.
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