What you need to know about: Habito

Written by Lori Campbell on 10th Sep 2020

You may already manage your bank accounts, investment and pensions online – and now you can even handle your mortgage entirely from your mobile phone. 
However, it can be easy to feel confused and overwhelmed by the number of new providers and products popping up – especially when they all appear to do the same thing on the face of it.
In response to demand for more guidance on how to choose between different products, Good With Money has introduced ‘need to know’ product and provider reviews.
Here we look at Habito – an online mortgage broker providing a free and entirely online service to first-time buyers, those re-mortgaging or buy-to-let landlords. 




The deal

Habito is an online mortgage broker that promises to take care of the entire mortgage process for you – hassle-free. It avoids industry jargon and offers round-the-clock advice to help users apply for a mortgage from anywhere in the world. It also offers its own range of buy-to-let mortgages, and hopes to deliver residential mortgages in the next few months.

In March 2020, Habito won Best Mortgage Broker at the British Banking Awards. Now a certified B-Corp businesss, it has attracted more than £30 million of investment from large backers including Ribbit Capital, Mosaic Ventures, TransferWise chief executive Taavet Hinrikus and Funding Circle founder Samir Desai.

In August 2020, it confirmed it had raised £35 million of investment as part of its Series C fundraise. Investors from the round include international venture capital firms and new investors Augmentum Fintech, SBI Group and mojo.capital.

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User-friendliness

Anyone who has ever applied for a mortgage will know it’s not usually the most ‘user-friendly’ experience. However, Habito is aiming to change that, to – as it says – “end mortgage hell forever.”

You’ll start by filling out an online application with your personal information and borrowing needs, which should take no more than 10 minutes. This is followed by an online ‘chat’ with a Habito chatbot, a digital mortgage advisor that will ensure you have completed your application correctly and ask some further questions. You will then be transferred to a human mortgage advisor to agree on the best type of product for you.

Once you have done this, Habito will digitally track and access mortgage deals from the entire market of more than 90 lenders (this is around 20,000 products) in just a few seconds. It will then come up with the best product for you that would be likely to offer a Mortgage in Principle. Once you have agreed on the product with your mortgage advisor, you’ll be asked to upload any relevant documents to the Habito dashboard and it will apply for a Mortgage in Principle from your chosen lender on your behalf. A credit check will be performed at this stage.

Obtaining a decision in principle should take from 24-48 hours – faster than making an appointment with a bank, writing out an application and sending documents by post.

 

Is it safe?

Like all mortgage brokers, Habito is authorised and regulated by the Financial Conduct Authority (FCA) so must follow rules on treating customers fairly and making product and service terms and costs clear. You have the right to complain to the Financial Services Ombudsman if issues can’t be resolved.

Habito requires you to upload personal documents to a password-protected account and they will then be sent to your chosen lender. Some would view this as more secure than sending by post, as traditional brokers would usually do. However, you are relying on Habito to keep you information safe from being hacked.

 

Sustainable option

In August 2020, Habito became B Corp certified, meaning it has made a legal commitment to put people and planet on the same level as profit.

It is measuring its impact on society and the environment in two ways:

  • A better Habito: weaving a focus on impact into everyday activities, like recycling, energy use, fair pay, and diversity and inclusion. It calls these ‘hygiene’ changes — they’re things it believes every company should be doing.
  • A better world: driving a positive change beyond the company, for its customers and out into the world. It’s creating Impact Business Models (IBMs) to support this work.

Habito searches the entire market for the best mortgage deal for your circumstances and doesn’t currently have an option that takes sustainability into account.

 

Unique selling points

  • Handles entire mortgage process. Habito isn’t just a comparison site. It will both find and get your mortgage for you, guiding you through the whole process from searching for deals to sorting all the legal stuff.
  • Searches the entire market. Habito’s unique technology means it can search more than 90 lenders and 20,000 products in just a few seconds to find the right product for you.
  • Impartial. Habito will recommend the best lender and product for you – even if it doesn’t have a commercial agreement with that lender. Many traditional comparison sites will only recommend products that it can make money from.

The plus points

  • Available 24/7. Get personal advice from impartial mortgage experts over live chat at any time and from anywhere in the world.
  • Easy to use. Habito’s simplicity, and easy-to-understand language is a huge plus point in the often confusing and frustrating world of moving home.

Any drawbacks?

  • Not for those with debt issues. Habito won’t work for you if you have County Court Judgements (CCJS) against you or have been made bankrupt.
  • Requires technology. Habito operates entirely online, meaning you will have to be computer literate and also have access to a scanner to send them your documents.

Cost of use

Using Habito as a broker to find your best mortgage deal, and apply for it on your behalf, is completely free.

It also offers a ‘Habito Plus’ service where it will handle all your buying admin, including price negotiation, an in-depth property survey, conveyancing and legal work, for a fixed fee that starts at £2,000.

In July last year it added ‘Habito Go’ to its offering, which allows first-time buyers to become cash buyers. For a fixed fee starting at £2,500 (averaging at £2,900) it offers everything available with Habito Plus, as well as providing eligible customers with a cash advance to help speed up the buying process.

 

How do these costs compare to competitors?

Habito does have competitors, including Trussle and MortgageGym, which also offer a fast and free online mortgage service. Trussle is linked to property portal Zoopla to show you properties that might be suitable for your budget and needs. However, Habito claims to have access, through its innovative technology, to more mortgage lenders and products than its competitors.

Habito makes its money from procurement fees paid by lenders in return for introducing customers to their mortgages. Most mortgage brokers work like this, although some are now requesting an upfront fee to cover ‘administration’. Habito also offers life insurance through an insurance partner and conveyancing services via Premier Property Lawyers.

 

Other options

Similar digital mortgage brokers worth considering are:

Trussle

MortgageGym


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