Better Mortgage Review for 2023

Better mortgage rates

There are relatively few lenders that consistently offer lower interest rates, closing costs, and lender fees 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).

Average mortgage rates at major lenders

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

Borrowers may find their lowest rate by purchasing discount points, which are upfront fees added to your closing costs. It’s essentially pre-paying interest to reduce your monthly mortgage payment.

Home buyers who use a Better real estate agent are also eligible for a $2,000 lender credit when they finance the purchase of their new home with a conventional loan.

In short, home buyers and homeowners using Better Mortgage could stand to save a lot. But offers vary by customer. So make sure you shop around to find your best deal.

Better refinance rates

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

But you’ll have to submit a loan application 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.

Better Mortgage review for 2023

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

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 seems to deliver 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:

• Qualify for a preapproval letter
• 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 up to 10 days faster than average. By comparison, the average mortgage or refinance closes in about 30-60 days
• Better also says that, on average, its customers save “thousands.” Savings will vary by customer, of course. But it’s worth checking rates and costs to see whether Better is competitive for you
• Better provides helpful information, even to those who do not finance a new home through its services. Its website and mobile app also offer resources for first-time home buyers, articles, guides, FAQs, and a mortgage calculator that helps you estimate your monthly mortgage payment
• Better offers comprehensive real estate services. Beyond mortgage loans, the online lender also offers homeowners insurance, title insurance, and you can even partner with a local Better real estate agent to guide you through your home buying process

The Better Price Guarantee

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

"If you think another lender has a more competitive price, just send us their loan estimate within one business day from the date it was issued. We’ll either do better by at least $100, or send that $100 to you; you win either way."

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 $100 check.

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

To actually collect the $100, 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 $100 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 $100 check based on that confidence is at least worth a look.

Better mortgage customer service reviews

Better received high marks for customer service in the most recent J.D. Power mortgage satisfaction study. It tied with Bank of America for the sixth spot.

Additionally, 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 1,000 mortgage customers in 2021.

Mortgage-related complaints at major lenders

Types of loans offered by Better Mortgage

Home loan options from Better include:

• Conventional loans: This loan option conforms to loan limits set by Fannie Mae and Freddie Mac, which are currently $ in most parts of the country. In some instances, home buyers can qualify for a conventional mortgage with as little as 3% down payment and a FICO score of 620
• 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 more flexible credit report prerequisites, but Better’s minimum credit score is 620. Keep in mind this type of loan requires mortgage insurance premiums (MIP) for the life of the loan
• Jumbo loans: Jumbo mortgages are for people who need a bigger loan than the conforming loan limit. Better allows loan amounts up to $3 million
• Fixed-rate mortgages: A fixed-rate mortgage locks in your interest rate for the entire loan period. Better offers loan terms of 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

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 50% — depending on their particular circumstances. That’s pretty generous. With most conventional loans, DTI is capped at 43 percent.

Real estate investors can also finance the purchase of an investment property with a Better home loan.

Refinancing with Better Mortgage

In addition to home purchase loans, homeowners interested in refinancing their current mortgages may find what they’re looking for with Better’s lineup of refinance loans. These include rate-and-term refinancing and cash-out refinancing.

Whether you want to lower your monthly payments, drop mortgage insurance, cash out home equity, or change your loan term, Better says it can provide preapproval in minutes.

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 (refinancing is available for manufactured homes only)
• 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)

Where can you get a mortgage with Better?

Better Mortgage NMLS ID: 330511

At the time of writing, Better Mortgage is licensed in 49 states and Washington D.C. Better is not licensed in Nevada.

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 $100?

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 Nevada. Similarly, if you’re not excited about an online mortgage application process, then you may not be happy with this lender.

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.

Methodology

The Mortgage Reports considers multiple factors when reviewing lenders. These factors include credit and down payment requirements, loan types offered, customer service indicators, and availability of online tools. We then use these factors to rank lenders in four categories:

• Lending flexibility: Includes the number of loan types offered, special programs offered, minimum down payment requirements, and minimum credit score requirements
• Customer service: Includes CFPB complaints per 1,000 loans and average rating from other top rating services
• Ease of application: Includes the availability of an online pre-approval or pre-qualification process
• Online experience: Includes the robustness of the lender’s online offerings, including online chat availability, phone number availability, and learning center/help center availability