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Digital broker Habito to start lending mortgages – update

by: Joanna Faith and Victoria Hartley
  • 09/07/2019
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Online mortgage broker Habito has launched its first own brand mortgage products with a range aimed at buy-to-let landlords.

 

The company, which has an operations team of 45, said the move will bring “much-needed innovation” to the buy-to-let market, which has faced “heavy restrictions and punitive charges” in recent years.

Habito would not reveal the identity of its funding partner but said it is in talks with a range of pension, investment and insurance houses interested in a mortgage market launch, as well as traditional retail mortgage lenders keen to explore the benefits of ‘the new rails for mortgage products’ the platform has built.

Habito confirmed the full lending journey happens on its side before handing over to its fully-Application Programming Interface equipt (API) servicing partner, Pepper UK.

Speaking to Mortgage Solutions, Daniel Hegarty, founder and CEO of Habito, said: “The traditional lender’s response has been very positive. They see us as a good place to test new product lines. We are trying to be the rising tide and help the wider market to innovate.”

Hegarty said the platform is competing with price comparison websites for its customers attention and said the firm is ‘augmenting the market, filling in the bits the market doesn’t want to lend to,’ for example, high loan to value buy to let.

 

The proposition

 

The platform aims to offer customers a mortgage deal within 10 or 11 days. It will replace what it termed the “inflexible and outdated” Decision in Principle with the ‘Habito Instant Decision’, which it says will involve deeper checks at the outset including a soft credit search, an automated valuation and 100 Know Your Customer checks in real-time, guaranteeing greater certainty and speed.

The first 15 – 20 customers placed after the go-live at 8 a.m this morning will get 2.5% cashback.

The new range includes 2, 3- and 5-year fixed deals as well as 7-year and 10-year fixes, aimed at longer-term investors, with rates starting from 2.59 per cent for a two-year fix.

The cheapest 10-year fixed deals start from 3.51 per cent, while 7-year deals start from 3.31 per cent.

No minimum income is required for first-time landlords up to 75 per cent LTV and there are no minimum value or maximum LTV restrictions for ex-local authority flats

Applicants will need to show three months of income although self-employed customers will need two years’ proof of income.

Hegarty said: “We exist to free people from the hell of getting a mortgage. For buy-to-let landlords, hell means long waits, inflexible eligibility criteria and application decision uncertainty.

“We’re proud to bring to market a range of products that have been built with landlords in mind: long-term fixed rates, competitive pricing, low deposits and sympathetic to self-employed and older customers. We guarantee certainty and speed to offer. It’s the next generation of mortgages.”

Customers will only be able to access the products via the Habito Brokerage.

The launch will be supported by TV advertising and a targeted buy-to-let campaign aimed at landlords from next week.

The firm plans to launch company buy-to let and portfolio landlord mortgages later this year and a range of residential mortgages in the coming months.

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