Habito launches its own range of mortgages after green light from regulator

Nicosy

https://techcrunch.com/2019/07/09/habito-mortgages/

tldr:

• Being a digital-broker they'll be able to mine a lot of data to make decision re profitable segments. It says they'll initially launch with buy-to-let mortgages, I'm wondering if there's fewer providers since the tax changes and they're seeing more margin on offer?
• They plan to develop "a proprietary lending platform from scratch in order to be able to offer its own innovative mortgage products that plug some of the gaps in the current market." Apparently they're hoping other lenders may eventually want to use the same platform to launch their own digital lending products, which sounds very similar to the banking-as-a-service approach taken by Starling Bank.
• "The Habito platform integrates with the conveyancing process to add more transparency for the homebuyer, while the number of documents needed is said to be significantly reduced."
• "Habito is also keen to stress that its brokerage will operate as a separate business line and continue to provide “free, impartial, whole-of market mortgage advice to its customers” (as it is regulated to do so). The fact that the FCA approved Habito becoming a lender alongside running its brokerage business is also noteworthy and suggests that the U.K. regulator isn’t concerned about the company’s ability to keeps its business lines segregated."

"The mortgages are being funded via a commitment of £500 million investment provided by an unnamed “leading, FCA-regulated financial institution" - Any guesses which financial institution is the money bags in this deal?

csgohan4

I avoid Free brokers, you get what you pay for. Fine for easy cases, but I really don't have time to do 2 hour interviews and fill in piles of paperwork

nattybuk

csgohan4 wrote: »

I avoid Free brokers, you get what you pay for. Fine for easy cases, but I really don't have time to do 2 hour interviews and fill in piles of paperwork

Agreed. We tried Habito back in May, their approach was “let’s try one after another”. Even when our case wasn’t simple.

We then went with a specialist broker and have our mortgage offer.

Andysandy

I always look at the people at the top - the founder/CEO, COO and tech guy are all ex-Wonga. Indeed the CEO rose to the "Head of Decision Science" at Wonga, presumably deeply involved in helping potential borrowers make the decision to click-click-click and get those lovely low cost loans from their friendly website.

I have no doubt their websites and online stuff will be all flashy and impressive, but will reserve my opinion on whether they will end up "disrupting" the industry positively or whether it'll be the kind of pioneer Wonga was.

Nicosy

I think a large part of their model relies on removing the "work" side of mortgaging for newer/younger buyers (and remortgaging). So for those who really research, it seems like a poor proposition.

For some, the convenience offered by the online-only brokers either outweighs the additional cost OR they just have nothing to compare it to because going direct to a bank seems scary.

The above is true for a lot of the new online "alternatives" eg investing, utility switching, pensions etc

Mortgage_Adviser

It would be interesting to see how they would maintain their impartiality and as a broker don't start recommending themselves as a lender putting as a reason of recommendation the thing like 'easy to deal with' or 'speed of processing'.