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Better Mortgage Review
Better Mortgage offers a truly digital experience that takes you from rate lock to close around 10 days quicker than the industry average.
Better Mortgage Review
Better Mortgage offers a truly digital experience that takes you from rate lock to close around 10 days quicker than the industry average.
December 01, 2021 / Nadav Shemer
Better Mortgage Review
Better Mortgage offers a truly digital experience that takes you from rate lock to close around 10 days quicker than the industry average.
December 01, 2021 / Nadav Shemer
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At a Glance

Better Mortgage is a tech-powered independent mortgage lender backed by big investors like Citi, Goldman Sachs, and American Express. Better Mortgage offers conventional loans, jumbo loans, and FHA loans. Its sleek platform offers basic pre-approval based on a soft credit pull in three minutes. The average closing time is 32 days – about 10 days quicker than the industry average.

Key Figures

Loan types: Purchase, Refinance

Loan products: Conventional, Jumbo, FHA

APRs start from: 2.477%

Minimum credit score: 620

Repayment terms: 15-30 years

Pros

  • Basic pre-approval in 3 minutes
  • Closes 10 days faster than industry average
  • No lender fees

Cons

  • FHA loans for purchase only; no VA or USDA loans
  • Not available in HI, MA, NV, NH

One of the best things about Better Mortgage’s tech-powered mortgage process is that it can get you pre-approved, formally approved, and into your home quicker than most other lenders. Another benefit to choosing Better Mortgage is the absence of any lender fees. That means there are no origination fees, no application fees, no processing fees, and no underwriting fees. The end result: your APR ends up being less than you would pay to most other lenders.

On the flipside, Better Mortgage has fewer loan products than other lenders. FHA loans are offered for purchase but not for refinance, while VA and USDA loans aren’t offered at all. As of October 2021, Better Mortgage still wasn’t licensed to do business in four states: Hawaii, Massachusetts, Nevada, and New Hampshire.

How It Works

Better Mortgage’s sleek digital platform gives you basic pre-approval (similar to what most lenders call pre-qualification) within three minutes and formal pre-approval within 30 minutes – which is better than the drawn-out process typical of larger banks. The platform emphasizes transparency, letting you know exactly where you are at all times during the process. If you get stuck, Better Mortgage offers 24/7 phone assistance. You’ll be given the option of locking in your rate immediately after basic pre-approval.

Better Mortgage breaks the mortgage process down into five steps:

1.Basic pre-approval. Find out how much you can borrow and your interest rate in as little as 3 minutes – and lock in the rate if you it looks good to you. At this point, you’ll get a basic pre-approval letter that you can show to agents and sellers. This letter is based on your stated income and a soft credit pull.

2.Home search. Look for a home on your own or with the help of one of Better Mortgage sister company Better Real Estate’s vetted agents.

3.Verified pre-approval. Upload financial documents such as pay stubs, tax returns, and bank statements for Better Mortgage to review. If approved, you’ll get a verified pre-approval letter that you can show to agents and sellers that require a more formal letter than the basic one you received at the beginning. This letter is based on your income, assets, and a hard credit pull. It takes around 20 minutes to upload all documents and another three minutes before you receive your letter.

4.Make an offer. With your verified pre-approval letter ready, you can now make an offer with confidence.

5.Close. Work with Better Settlement Services and Better Insurance (or external services, if you prefer) to close your loan. The exact timing depends on a few factors, including how quickly you can submit all required documents, as well as the timing of third-party services associated with the mortgage process. Better typically closes within three to six weeks, with an average close time of 32 days – 10 days quicker than the industry average.

Types of Loans

Better Mortgage finances purchasing or refinancing related to single-family homes, multi-family homes, townhouses, condominiums, planned unit developments, and investment properties. The minimum credit score for all Better Mortgage products is 620, while down payments vary from product to product.

Purchase options include:

  • Conventional loan – for borrowing up to conforming limit ($548,250 in most zip codes in 2021); minimum down payment not stated, but likely around 10%
  • Jumbo loan – for borrowing up to conforming limit ($548,250 in most zip codes in 2021); minimum 10% down payment.
  • FHA loan – minimum 3.5% down payment.

Refinance options include:

  • Conventional rate and term refinance – for refinancingup to conforming limit ($548,250 in most zip codes in 2021); maximum CLTV not stated, but likely around 90%.
  • Jumbo refinance – for refinancing above conforming limit ($548,250 in most zip codes in 2021); maximum CLTV not stated, but likely around 90%.
  • Cash-out refinance – allows you to get cash from your home’s equity by refinancing for a new mortgage for more than you owe; max CLTV not stated but likely around 90%.

Loan Features

  • As an innovative, independent lender, Better Mortgage offers a truly 100% online application process. By moving everything away from branches and onto the internet, Better Mortgage is able to cut time and expenses, offering you a cheaper, quicker mortgage process. Highlights include:
  • Notifications and alerts sent straight to your inbox
  • One convenient online hub for all your documents
  • No commissions or hidden fees
  • Smart tech that finds you eligible discounts
  • Free guides to homebuying with helpful advice
  • Better price guarantee – Better Mortgage will match any competitor’s offer and give you $100 cash
  • Optional support from Better Mortgage sister companies – Better Real Estate, Better Settlement Services, and Better Cover (homeowners insurance)

Rates and Terms

Interest rates at Better Mortgage are close to the national average, but the absence of any lender fees brings the APRs to well below average. Repayment terms are for 15, 20 or 30 years, and 5/6, 6/10, and 10/6 ARMs are also on offer. Like other top lenders, Better Mortgage allows borrowers to pay points (1 point = 1% of the loan amount) at closing in exchange for a lower interest rate.

Sample purchase rates for borrowers with excellent credit, $500,000 purchase with 20% down payment, and around 0.5 points:

  • 30-year fixed: 3.125% (3.159% APR)
  • 15-year fixed: 2.500% (2.582% APR)
  • 30-year fixed FHA: 2.875% (3.037% APR)
  • 5/6 ARM: 3.000% (2.856% APR)

Sample purchase rates for borrowers with excellent credit, $500,000 home value with 80% CLTV, and around 0.5 points:

  • 30-year fixed: 3.000% (3.032% APR)
  • 15-year fixed: 2.375% (2.441% APR)
  • 5/6 ARM: 2.625% (2.724% APR)

*Last updated October 31, 2021

Summary

Better Mortgage is one of the rising stars of mortgage lending, using technology to change the way people apply for their homes. While the banks can keep you waiting with loads of paperwork and inefficiencies, Better Mortgage has streamlined the whole process from A to B–giving you less of a headache and ensuring you can get in a home as soon as possible. The rates and fees are highly competitive, too. Overall, if you want a fully digital mortgage experience and if you live in one of the 46 states where Better Mortgage is licensed, then you should definitely check it out.

Contact Better Mortgage

Better Mortgage offers a fully digital mortgage experience backed by 24/7 phone assistance. The lender has a B rating at the Better Business Bureau and 4.3-star rating from 600+ reviews on Trustpilot.

HQ: New York, NY

Get started now, visit Better
By Nadav Shemer
Nadav Shemer specializes in business, tech, and energy, with a background in financial journalism, hi-tech and startups. Nadav writes for bestonlinemortgageloan.com. He enjoys writing about the latest innovations in financial services and products.
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