Better Mortgage Review for 2021

Better Mortgage has a reputation for low rates, next-to-nothing fees, and a seamless online experience. Learn more here.

Lending flexibility 3.5
Customer service 5.0
Ease of application 5.0
Online experience 4.5
Minimum down payment 3%
Minimum credit score 620
Loan Products Offered

Fixed-rate mortgage
Adjustable-rate mortgage
Jumbo mortgage
FHA mortgage
Fannie Mae HomeReady mortgage
Investment property loan

Best Features

  • Typically low mortgage rates
  • No loan officer commissions, lender origination fees, application fees, or underwriting fees
  • Fully online application
  • Mortgage pre-approval and closing time tends to be quick

Drawbacks

  • Can't apply for a mortgage in person
  • Not licensed in all states
  • No VA or USDA loans, and no home equity products

Overview

There are a number of 21st-century mortgage lenders. But few have made as much of a stir as Better Mortgage (often known simply as "Better").

Better was founded in 2014 and began operations in 2016. Yet it has already set up billions of dollars worth of mortgages and helped many thousands of borrowers.

The company's main draw is its easy online mortgage process. The company says its innovative tech can cut closing times in half and save borrowers more than $3,000 on average.

However, Better is missing some key mortgage products, like USDA land VA loans. And rates won't be competitive for every borrower.

If you want a digital mortgage lender, and if Better has the type of loan you need, it's definitely worth a look. Just remember to check rates with a few other lenders to make sure you're getting the best deal possible.


Better mortgage rates

There are relatively few lenders that consistently offer lower rates and closing costs than their competitors. But Better Mortgage may be one of them.

Along with generally low mortgage rates, Better offers substantially lower fees than other lenders. It even eliminates the “origination fee” altogether (which is typically around 1% of the loan amount).

In short, borrowers with Better Mortgage could stand to save a lot. But offers vary by customer. So make sure you shop around to find your best deal.

Average mortgage rates at major lenders

  Better Mortgage Rocket Mortgage Wells Fargo Freedom Mortgage
Average 30-Year Interest Rate, 20201 3.03% 3.20% 3.62% 2.92%
Median Total Loan Costs, 2020 $2,440 $4,610 $3,370 $3,340
Median Origination Fee, 2020 $0 $2,950 $1,280 $0

Average rate and fee data sourced from public rate and fee records required by the Home Mortgage Disclosure Act (HMDA).

Shop Better Mortgage for low rates here.

Better refinance rates

Better refinance rates are similar to its mortgage rates. They tend to be on par with or slightly lower than other big mortgage companies.

But you’ll have to apply to see if you actually qualify for the refinance rate advertised. 

Your own refinance rate may be higher or lower than what you see on Better’s website based on your loan size, credit score, debt-to-income ratio (DTI), and other factors.

Get a custom refinance rate from Better Mortgage here.

Better mortgage review for 2021

When asked to contribute to this Better mortgage review, a company spokesperson said:

“Our mission is to change the way Americans buy and refinance their home by delivering lower rates, faster closing times and a radically transparent, technology-driven process.

“We prioritize the consumer experience through an online process, with instant loan estimates, honest rate quotes and 24-hour verified pre-approvals, all complemented by support from non-commissioned loan officers.”

And the company delivers on that promise for many people.

If you’re the kind of tech-first shopper who dreads going into a bank branch to fill out paperwork, Better’s business model might be perfect for you.

But there are some downsides. Better does business almost exclusively online — you can speak to loan officers over the phone, but don’t expect face-to-face communication.

And, because Better was founded so recently, the company is still building out its mortgage offerings.

It’s not yet licensed in all states and is missing some major loan types, like VA and USDA loans.

Working with Better Mortgage

With Better, the whole idea is an end-to-end online experience. So you can use your phone, computer, or another device to:

  • Prequalify for a mortgage
  • Apply for a mortgage
  • Upload documents securely
  • Close on your home loan
  • Manage your account
  • Sign documents using e-signature

If you get stuck at any of these steps, you can still contact a loan officer by phone. Or you can use Better’s website to schedule a time for them to call you.

But in general, Better tries to keep everything online. This method saves the company time and money — and those savings are largely passed on to borrowers.

Better claims you could close on your home loan in as little as 14 days. By comparison, the average mortgage or refinance closes in about 30-60 days.

Better also says that, on average, its customers saved $3,557 apiece on loan costs in 2018.

Savings will vary by customer, of course. But it’s worth checking rates and costs to see whether Better is competitive for you.

The Better Price Guarantee

Better Mortgage strongly promotes its “Better Price Guarantee,” which states:

“If you think another lender has a more competitive price, send us their loan estimate within 3 business days from the date on the loan. If we can’t beat it by at least $1000, we’ll give you $1000 in cash. This isn’t a marketing ploy or a flash sale. It’s simply our promise to you.”

For example, if Better and Wells Fargo offered you the same rate, but Wells had lower closing costs, Better would either have to lower its costs or cut you a $1,000 check.

That seems like a pretty good deal at face value. But of course, there’s some fine print, too.

To actually collect the $1,000, you must close your mortgage using the same company and the exact same loan offer that you used to challenge Better’s pricing. And you have to show Better proof of your funded loan within 30 days of closing.

So if your loan amount or sales price changes, or you change loan programs, or you lock in a different rate any time during your loan process, Better’s deal becomes null and void.

All in all, there are a lot of stipulations around Better’s $1,000 offer. But the real point here is that Better Mortgage is extremely confident about its pricing. And a company that’s willing to cut you a $1,000 check based on that confidence is at least worth a look.

Customer service and mortgage servicing

Unlike some bigger mortgage lenders, Better is not rated in the annual J.D. Power mortgage satisfaction study.

However, online reviews suggest Better Mortgage customers are pretty happy with the service they receive.

The company has an average review score of 4.3 out of 5 across multiple review platforms. And it got fewer than one complaint per 100 mortgage customers in 2020.

Customer service reviews at major lenders

  CFPB Complaints, 20204 Complaints per 100 Mortgages, 20205 J.D. Power Satisfaction Score, 20206
Better Mortgage 57 0.05 Not Rated
Rocket Mortgage 391 0.03 883/1,000
Wells Fargo 554 0.05 840/1,000
Freedom Mortgage 288 0.04 817/1,000

Types of loans offered by Better Mortgage

Home loan options from Better include:

  • Fixed-rate mortgages: A fixed-rate mortgage locks in your interest rate for the entire loan period. Better offers 15, 20, or 30-year fixed-rate loans
  • Adjustable-rate mortgages: ARMs have an interest rate that’s locked for the first 5, 7, or 10 years. After that, your mortgage rate floats with the market
  • FHA loans: FHA mortgages are backed by the Federal Housing Administration, and let you buy with a down payment as low as 3.5%. They also tend to have easier credit requirements
  • Jumbo loans: Jumbo mortgages are for people who need a bigger loan than the conforming loan limit, which is currently $548,250

Better also offers Fannie Mae’s “HomeReady” loan program, which is meant to help borrowers with lower income and limited cash for a down payment.

It’s also worth noting that Better might be able to help you if you have above-average levels of debt.

This lender says it will sometimes lend to borrowers with debt-to-income (DTI) ratios as high as 55 percent — depending on their particular circumstances. That’s pretty generous. With most conventional loans, DTI is capped at 43 percent.

Types of mortgages Better does not offer

There’s no point pretending Better has a full portfolio of mortgage products — at least, not yet. Its lack of VA and USDA loans means it will be a non-starter for some borrowers.

Similarly, Better does not offer loans for:

  • Manufactured or modular homes
  • Multi-family homes containing five or more units
  • Co-op units
  • Mixed-use properties
  • New home construction
  • Home equity loans
  • Home equity lines of credit (HELOCs)

Better does, however, offer home loans for investment properties. And it has low-down-payment options for owner-occupied transactions that let qualified borrowers buy with as little as 3 percent of the purchase price down.

Where can you get a mortgage with Better?

Better Mortgage NMLS ID: 330511

At the time of writing, Better Mortgage is licensed to lend in the following 46 states:

Alabama (AL)
Alaska (AK)
Arizona (AZ)
Arkansas (AR)
California (CA)
Colorado (CO)
Connecticut (CT)
Delaware (DE)
Florida (FL)
Georgia (GA)
Idaho (ID)
Illinois (IL)
Indiana (IN)
Iowa (IA)
Kansas (KS)
Kentucky (KY)
Louisiana (LA)
Maine (ME)
Maryland (MD)
Michigan (MI)
Minnesota (MN)
Mississippi (MS)
Missouri (MO)
Montana (MT)
Nebraska (NE)
New Jersey (NJ)
New Mexico (NM)
New York (NY)
North Carolina (NC)
North Dakota (ND)
Ohio (OH)
Oklahoma (OK)
Oregon (OR)
Pennsylvania (PA)
Rhode Island (RI)
South Carolina (SC)
South Dakota (SD)
Tennessee (TN)
Texas (TX)
Utah (UT)
Vermont (VT)
Virginia (VA)
Washington (WA)
Washington, D.C. (DC)
West Virginia (WV)
Wisconsin (WI)
Wyoming (WY)

Better is very much an online-only lender. There are only a handful of branches, but the whole idea is that the systems available to you online are intuitive and easy to use.

Of course, you can get plenty of assistance and support from loan officers over the phone. And these may be more helpful than those employed by many other lenders. That’s because they don’t operate on commission. So they’re closer to neutral advisors than salespeople.

Is Better the best mortgage lender for you?

So what should you take away from this Better mortgage review?

Well, that Better Price Guarantee may be enough to get you to apply all on its own. Who wouldn’t want the chance to save or make $1,000?

And applying might be a good idea anyway. You may well end up with a better deal than you could find elsewhere.

But there are exceptions. You won’t get far if you want a VA or USDA loan, or if you live in a state where Better isn’t licensed. And you won’t be happy if you hate technology.

The bottom line: As with all lenders, compare the service you’d receive from Better as well as the company’s rates and fees. That’s the best way to find out if a mortgage lender is right for you.

Find and lock a low rate from Better Mortgage here.

Compare to These Lenders

Minimum down payment: 0%
Minimum credit score: 620
Minimum down payment: 3%
Minimum credit score: 580
Minimum down payment: 3%
Minimum credit score: 580

Sources:

  1. Average mortgage rates and fees sourced from self-reported data mortgage lenders are required to file under the Home Mortgage Disclosure Act. Rates and fees shown reflect the previous year’s data and may not align with today’s mortgage rates
  2. Monthly principal and interest payments calculated using TheMortgageReports.com mortgage calculator. Payments shown are based on a $200,000 loan amount and assume a “very good” credit score. Property taxes and homeowners insurance are not included. Your own monthly payment will vary
  3. Number of mortgage originations for the previous year sourced from self-reported data mortgage lenders are required to file under the Home Mortgage Disclosure Act
  4. CFPB Complaints reflect the number of mortgage origination or closing-related complaints filed with the Consumer Financial Protection Bureau for the previous year
  5. Complaints per 1000 mortgages reflect the number of official complaints filed against a lender with the CFPB for the previous year, compared to the lender’s total number of mortgage originations for the previous year
  6. JD Power Rating reflects the company’s customer satisfaction score according to JD Power’s most recent Primary Mortgage Origination Satisfaction Study. Survey respondents score their lenders in four areas: application/approval process, communication, loan closing, and loan offerings