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Genius? Risky? Exciting? A poison challis?
Where many new challenger banks, personal / family finance houses, P2P lenders and such like who have entered the mortgage market, and many have gloriously failed too along the way, online mortgage broker, Habito, has announced this morning that it has entered the mortgage market providing its first range of white labelled mortgages aimed at individual buy-to-let landlords.
Habito is the online broker, which has raised £24m to be able to trade (source https://www.crunchbase.com/organization/...e-by-owler), it has a staff of 45, and a turnover of £3m (profit figure not available yet) and is now in talks with a variety of funding partners for it’s wider launch.
Their CEO says “The platform is competing with price comparison websites for its customers attention and the firm is ‘augmenting the market, filling in the bits the market doesn’t want to lend to’.”
According to the firm, the new range will be available to all borrowers including first-time, self-employed, retired and older landlords. Limited company and portfolio products expected to follow shortly.
Two-year fixed rates will start from 2.59%, seven-year fixed rates are available from 3.31% and ten-year fixed rates from 3.51%.
Habito revealed that no minimum income will be required for first-time landlords up to 75% LTV and there will be no minimum value or maximum LTV restrictions for ex-local authority flats. Applicants will need to show just three months of income (two-years' proof will be required for self-employed borrowers).
Only time will tell if this brokerage can succeed as a lender too, especially in light of the need for ‘treating customers fairly’. Will the broker recommend it’s own mortgage in front of potentially more flexible and better value deals from other lenders? As a mortgage product solution provider, they may well find a place with a certain demographic. Other mortgage advisers offer a more comprehensive solution, including a life cover proposition, sourcing arrangements from a wide range of insurers. Habito only sell AIG products.
Will they succeed in the no minimum income, low interest rate / margin, price driven, high debt-to-income structure, high LTV, world that we are in today?
Possibly, yes. We applaud their creative and innovative approach and forward thinking aspirations. We also hope that all of their customers know who the lender is behind the Habito white label product offering, and what their protection is too.
So, well done Habito for trying something different and we will all be watching with interest.
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