This article will review Habito. For any questions, or if you are looking to invest, you can contact me using this form, or on the WhatsApp function.
Most people might have heard about managing investments, pensions, bank accounts, etc., online. But only a few might be able to know about the idea of managing mortgages online.
Yes, Habito is the first of its kind, which helps people acquire mortgage services online. Moreover, they don’t even charge brokerage fees from the customers as they get directly paid by lenders in the form of a commission.
After a person called Dan tried to buy a home, which went wrong, Habito was created to end most of the problems such as paperwork, misinformation, etc., which have often been faced by many people.
In the year 2014, Dan tried to purchase his first house by acquiring mortgage services. This process was not successful in the case of Dan, but it has sparked an extraordinary idea in his mind.
He then thought about providing online mortgage services to the people that are hassle-free. He then started pursuing his idea and became a team of 5 members by the year 2015.
In 2016, Habito was able to acquire the brokerage license from the Financial Conduct Authority. On 12th April 2016, Habito was able to process their first-ever mortgage online.
They were able to create a live chat option for the convenience of the users as well. In 2016, it was estimated that Habito was able to sort 245 mortgages.
Later in the year 2017, the Habito team moved to their current headquarters, which is The Loom building located in Whitechapel, East London. In the same year, they were able to launch their first ad campaign.
By that time, a team of 5 members has grown and reached a team of 50 people. According to the stats provided by Habito, they were able to sort £361 million worth of mortgages by the year 2017.
In the year 2018, Fairer Finance certified Habito to be “Jargon-free”, which suggests the terminology could even be understood by normal people who are new to this field.
In the same year, i.e., 2018, Habito was able to sort mortgages of people that was worth £1 billion.
In the year 2019, Habito partnered with various websites which are ‘Money Saving Expert’, ‘Money to the Masses’, ‘Finder’, ‘The Move Market’, ‘Starling’, and ‘Property Investment Project’.
In the same year, Habito was able to launch its own mortgages, which makes it the first company to be both a broker as well as a lender.
By 2019, Habito was able to sort £2 billion worth mortgages and the team of Habito was concluded to be having an employee count of 200 people.
In the year 2020, Habito launched its one of a kind platform known as ‘Habito Plus’, which presents everything that a customer would require in terms of mortgage services.
They were able to gain more than 5,000 reviews on Trustpilot, which gained them a rating of about 4.8 stars out of 5. Having that many positive reviews on Trustpilot is a major achievement.
They have also been awarded the ‘Best Mortgage Broker’ at the ‘British Bank Awards 2020’. In the same year, they were also able to sort £4 billion worth of mortgages.
Working Procedure of Habito:
Habito is designed in such a way that its primary objective is to provide a fast and hassle-free way of finding mortgage deals available to a person. Moreover, it is free to use, and this makes it even better for a person looking for mortgage deals.
After a customer provides some basic requirements and details, Habito makes use of a brilliant algorithm to search over 20,000 products that are offered by more than 90 lenders in order to find a suitable deal for the customer.
The process of searching the right deal based on the algorithm takes just around 15 minutes. By doing so, people are able to save a huge amount of time that they would have to waste if they opt for the traditional way of finding mortgage services.
Habito also provides solutions for the people with the help of an online chat or via phone call. People are also able to manage their mortgages using Habito, adding to which, they can also use it for searching remortgaging deals.
After a person has successfully created an account at Habito, they will be required to fill their personal and financial information. People should also enter the details of the type of mortgage that they are looking for.
The sign-up procedure is very simple and user-friendly at Habito. Users are able to enter the personal/financial details and requirements within a time period of 10 – 15 minutes.
This information will then be passed on to a mortgage expert working at Habito, with whom the customer can be able to contact via live online chat feature or a phone call.
The Habito experts are generally available from 9 AM to 9 PM except for Fridays, when they will available from 9 AM to 5.
After that, the user would have to submit the necessary documents to the Habito dashboard. Upon successfully uploading the documents, Habito will send these documents to the lender on behalf of the user.
Following this, Habito will require anywhere around 24 to 48 hours to acquire an agreement in principle. This process generally depends on the case of the individual and the time taken for sending the documents.
However, this process is very fast when compared to the general procedure, where a person would have to visit a branch of the bank or a mortgage broker, filling the details in an application, and then having to send the documents by post.
The sign-up process, as discussed earlier, is very simple and has pop-up boxes that are easy to understand. Applicants would have to start by registering with their social media account or an email address.
Individuals would have to confirm that they haven’t filed for bankruptcy or have been issued a judgment by a country court or individual voluntary arrangement. These sorts of situations won’t provide products to individuals.
Users will then be asked for their requirements, whether it is a mortgage for buying a house or remortgaging. They would also be asked whether they are buying a house for the first time or moving to a house or seeking a buy-to-let loan.
After that, a person would be asked for the details about the property that they are willing to purchase along with the information such as the amount that needs to be borrowed, the tenure of the loan, the source of the funds, etc.
Finally, the user has to provide the financial details such as their employment status, dependents on their income, assets that are owned by them, debts, expenditure, etc.
This process won’t be requiring any sort of credit check, therefore, will not be harming a person’s credit report or leaving traces on a credit report.
After successfully completing all the above-mentioned steps, the user would have to contact the digital mortgage advisor/expert at Habito. The main objective of chatting with a mortgage expert is to ensure that the user gets a mortgage that fits his/her needs and confirms the details mentioned in the application.
The digital chatbot feature can be accessed by the users 24/7 and asks questions to the users such as whether they are planning any significant event in the following three years, planning to have children, etc.
Another thing asked by the chatbot is whether the individual would require a fixed or tracker mortgage, if so, for how long. The chatbot will then be able to recommend if the chosen product type is the best fit depending on the answers provided by the user.
The user would then be invited to have an online/webchat with the mortgage expert. The timings can be arranged between 9 AM – 9 PM and 9 AM – 5 PM (Fridays).
After agreeing for a product that suits an individual’s needs, Habito will apply for an Agreement in Principle on behalf of the individual. However, during this stage, the credit report of the user is accessed, and a footprint will be left.
Individuals are then required to scan and upload the required documents to their Habito account. The adviser will then suggest what should be done (documents required) by the user.
The adviser will keep the user updated and this whole process of completing an application can take around two to four weeks. Even after acquiring a mortgage, Habito will provide notifications when there is availability for the user to have cheaper rates.
Habito has got authorization and is regulated by the Financial Conduct Authority, which states that the company is bound to the same regulations as the majority of the financial companies located across the UK.
People also get a chance to complain to the FOS (Financial Ombudsman Service) if the service issues of Habito couldn’t get resolved.
The company also makes a promise that they won’t be sharing any of the confidential information of the user to a third party, unless necessary.
When a person uploads their documents on to Habito (either Financial or Personal), the scanned documents will be entered into a password-protected account, which will be chosen to be sent to the lender later.
This is actually a safer process when compared to the traditional mortgage broker where the documents would have to be sent via post or email.
There are no hidden charges or fees and the services offered by Habito can be acquired by a person completely free of cost. Habito is paid in the form of commission by the lenders and therefore, doesn’t charge from the customers.
However, the number of commissions that are charged to a lender by Habito will also be revealed.
How does Habito maintain financial independence while lending money?
Habito is not only an online mortgage broker but in the year 2019, it has also started out as a mortgage lender. Habito currently offers buy-to-let mortgages and is planning to offer an innovative range of residential mortgages in the upcoming days.
In order to successfully maintain financial independence, Habito has separated its mortgage brokerage department from its lending department. It ensures that Habito’s own mortgage services will appear as a recommendation unless the product specifically meets with the individual’s needs.
Habito’s mortgage experts are paid the same amount of commission whether they recommend their own mortgage or a mortgage offered by any other lender.
How does Habito make profits:
As we have discussed, Habito does not require any sort of fees from the customers and the profits for the company arise in the form of commissions that have been obtained from the lenders.
Habito also offers premium services such as Habito Go and Habito Plus which require an upfront fee from the customers. They have also launched a life insurance cover by partnering up with an insurance partner which definitely allows them to have more profits in commissions.
Adding to that, they have also launched their own mortgage service, which means that they would be able to get profits from the amount that has been lent by them.
Thus, the administration costs and the profits of this company can be obtained in the form of fees and commissions.
Services offered by Habito:
Habito Plus – Habito Plus can be said to be a complete home buying service, which has been designed by them to guide and help buyers through all the aspects of purchasing a property.
There is a fixed fee involved to avail of this service, which starts from a price range of £2,000. Habito Plus offers some key features such as an in-depth survey about the property, negotiation with the price that needs to be paid, helping in completing all the legal work that needs to be done during the purchase, etc.
By having all the required features and services within one place, Habito assures that the people would be able to carry out the legal work and conduct surveys within days instead of weeks.
However, the people who only want to make a purchase can find the services offered by Habito Plus to be beneficial. The people who are looking for a mortgage couldn’t benefit from these services.
In general terms, Habito Plus allows the buyer to have leverage against the seller by providing negotiating advice, valuation of the property and legal support. Anyhow, people should confirm whether or not they can benefit from the services for the fee that they have to pay.
Habito Go – Habito Go was launched by Habito in October 2019 for allowing first-time property buyers to become cash buyers. The fee for the Habito Go service usually starts from £2,500 and it can average up to £2,900.
Everything in the Habito Plus is included in the Habito Go along with the ability to provide a cash advance for the selected/eligible customers for securing the property that they want to buy.
The short-term loans can be availed using the Habito Go within a time period as low as 24 hours and in the case of advanced loans, it might take somewhere around 14 days.
This service generally speeds up the buying process and puts the first-time buyers in an advanced situation while negotiating the price of the property.
The eligibility criteria for the people who want to avail of the services offered by Habito Go is as follows:
- Only first-time buyers are eligible to avail of the Habito Go service and should have an age ranging between 25 years and 55years.
- The earnings of the customer who wants to avail of the services of Habito GO should be at least £30,000 and should have maintained a healthy credit history.
- The main objective of the customer for buying the property should be for living in it and not renting it.
- The customer should be able to buy a property worth up to £750,000 with at least 20% or more deposit amount, or they should be able to buy a property worth up to £500,000 with at least 15% or more deposit amount.
As the service has been launched recently, there hasn’t been any strong data about the service yet. However, it has been claimed that the people were able to have higher negotiating power with the help of this service.
Habito Life Insurance – Habito has joined hands with AIG in order to offer the customers, life insurance for covering their mortgages.
Customers are able to choose a decreasing term insurance plan for repaying their mortgages or a customizable level term plan in case of interest-only mortgages.
A Mortgage in Principle certificate – Agreement in Principle is the estimated amount of money that a lender is willing to lend an individual while acquiring a mortgage service.
If a person is not ready to move forward to a full Agreement in Principle, they can opt for the Mortgage in Principle certificate offered by Habito.
This means that the people who want to purchase a property can be able to let buyers and estate agents know that they are serious about the offer and have made a basic estimate on the amount that can be borrowed.
The Mortgage in Principle service at Habito is free of cost and requires no credit check. The average time required for this has been estimated to be somewhere around 5 – 10 minutes.
Advantages and Disadvantages of Habito:
There are quite some benefits and drawbacks of using Habito, let’s have a brief look at them.
- Everything can be done online, so there is no need for appointments. Moreover, the process being completely online, it is very simple when compared to most of the traditional mortgage brokers.
- The website is claimed to be user-friendly and can be easily understood by the user as it is said to be Jargon-Free.
- The services offered to the customers via human experts are available almost all week (12 hours a day), except for on Fridays (8 hours a day).
- The online services could be availed by the customer 24 hours a day while using Habito.
- Availability of a wide range of lenders (more than 90) where the application for the mortgage will be sent to the specific type of lenders depending on the financial needs of the customer.
- It is authorized and regulated by the Financial Conduct Authority (FCA), hence, it is considered to be safe and secure.
- If the best deal for a user is found outside the list of lenders available at Habito, it will still encourage the user to apply for that best deal.
- The referral program is also good, whereupon a successful referral and completion of the application, both the person who has joined and the person who referred will get a cash reward of £100.
- Assistance is not provided to the customers while they have to enter the information initially.
- Depending on the financial circumstances of a user (if complicated), it might be hard for the algorithm of Habito to find a suitable deal.
- People are required to have a minimum level of understanding about mortgages and how they work for efficiently understanding everything while using Habito.
- People who have debts prior to applying for a mortgage won’t be able to get a mortgage.
- People are required to scan their documents and send them online, which might be a little bit inconvenient for some users.
Habito has gained a lot of reputation as an online mortgage broker and the reviews more than 5,000 on Trustpilot declare that. People who think that they haven’t been able to benefit from the services offered by Habito can opt for other alternatives such as Trussle, MortgageGym, etc.
Moreover, the chances are less likely that a person won’t be able to benefit from the services offered by Habito. They also offer premium services namely Habito Plus and Habito Go which are helpful for the users depending on their needs.
That being said, if you require further guidance in selecting an online mortgage service provider or need services that are related to mortgages, you can avail of the expert financial advice offered by us.