The three-year London start-up has been using its platform to broker mortgage deals, specifically remortgage deals), something that has put the company amongst the digital tech startup elite in the UK – but now they will be able to offer the mortgages to customers directly.
Shifting from the consumer market, the company will be targeting landlords initial with buy to let mortgages, after gaining authorisation from the City regulation to be able to lend directly. This type of product is used by property investors, landlords and individuals that purchase a property to rent it out to the public or other businesses.
The tech company promises buy to let mortgage offers within 10 days, which should be half the time of its mainstream competitors. Habito will be using its instant decision platform and claiming to have the widest selection of Loan to Values and fixed-rate periods currently on the market.
Founder and CEO Daniel Hegarty says ‘he hopes other lenders will eventually want to use the same rails to launch their own digital lending products but in the meantime the company is excited to launch direct lending.
Longer term, Hegarty says he hopes to maximise the customer experience, speed and certainty that smarter use of technology offers and hopes that it will revitalise the mortgage lending space.
“All valuations are instructed automatically, fraud checks are automated and all documentation is handled digitally, meaning that customers won’t have to wait for physical post to progress their application,” says Habito.
One area that Hegarty says is ripe for innovation are mortgages suitable for self-employed people who don’t have a traditional financial footprint. Another opportunity the startup is eyeing up are mortgages with a much longer fixed term, which are more common in other countries but in the U.K. are typically restricted to two to three years.
Other digital mortgage companies making waves in the industry include whole-of-market broker, Mojo Mortgages, which raised £7 million in funding in February 2019 and Trussle which raised £14 million from Goldman Sachs in May 2018.