At a time in which banks seems to be more open to loaning money to buy properties, there are some nearly incomprehensible terms in the wording of mortgage loans which need to be decoded. Today we will explain everything about the credit intermediaries: who they are, what they do and how they operate in the sector.
This article is a result of a collaboration between idealista/news and the Portuguese association for consumer protection Deco, to explain easily without reaching for complicated terminology by financial entities.
What is a credit intermediary?
The Credit Intermediary isn’t a bank, but a natural or legal person with renowned prestige who participates actively in the process of credit concession and is paid for this.
Access to the Credit Intermediary activity depends on the authorisation and registry by the Bank of Portugal (BdP).
They are not authorised to concede loans, but they can present or propose credit contracts to consumers, supporting their preparation even if they have been presented or proposed by another entity.
They can hold credit contracts with consumers, but only in the name of a credit entity or a bank.
They can also lend advice services and personal recommendations about credit contracts and it has the obligation to help the consumer.
Also, when the credit intermediary intervenes, the loan can only be conceded by a credit entity authorised by the BdP.
What types of credit intermediaries exist?
There are three credit intermediary categories who comply with specific norms;
- Tied credit intermediary;
- Credit intermediary in an ancillary capacity;
- Non-tied credit intermediary (only a legal person).
Credit intermediaries can’t carry out activities that go beyond these specifications.
Tied credit intermediaries or credit intermediaries in an ancillary capacity are paid by the credit entity with the one the one they have a contract with. While those non-tied can be paid by the consumers to whom they lend services.
Note: Expressions such as “credit intermediary”, “credit intermediary”, “credit agent” or equivalent, in the company or denomination, they are of exclusive use for the authorised credit intermediaries.
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