Better.com offers a fast, simple online loan experience for borrowers by changing the old mortgage infrastructure and replacing it with user-friendly technology. The online experience is easy, the lending process is transparent and the rate offers are similar to those at traditional lenders.
- Better.com Review: Faster Approval for Comparable Rates
- How Does Better.com Compare?
- Better.com Customer Service and Loan Servicing
- Available Loan Types at Better.com
- Where Can You Get a Mortgage With Better.com?
Better.com Review: Faster Approval for Comparable Rates
Better.com provides borrowers with a quicker, more simplified mortgage process using an online origination platform while offering competitive rates. The website allows borrowers to access and complete their mortgage paperwork without having to leave their homes. Unlike many online mortgage lenders, Better.com offers six loan types to fund conventional and jumbo loans for both home purchases and refinances. In order to qualify, you'll need a minimum credit score of 620 and your pay stubs, tax returns and bank statements.
Better.com will ask for your stated income and will do a soft credit pull, completing the pre-approval process in just three minutes. In contrast, this process could take days with a traditional lender. If you're pre-approved, you'll see a menu of loan products you may qualify for along with an estimate of your monthly payment and annual percentage rate (APR). Where other lenders would require you to schedule a call with their loan officers, Better.com's online interface lets you manage your application anytime. Better.com does have mortgage experts available for human support in case you need extra help.
After processing your loan and securing funding, Better.com then transfers your loan to a permanent servicer that handles the loan for the remaining term length. This may lead to issues for you as a consumer, as your experience after the initial loan process will depend on those servicers. In addition, Better.com is only available in 30 states and the District of Columbia for now. However, we've seen Better.com expand its coverage continuously over the past year.
How Do Better.com's Mortgages Compare?
Better.com's online mortgage process provides users with a more convenient experience and enables the company to offer rates similar to those at large traditional lenders such as Chase or Bank of America. We compared three popular traditional banks to Better.com using rates based on a 30-year fixed-rate mortgage. In addition to not charging origination fees, Better.com has slightly lower rates and its monthly payments are similar to that of Bank of America and Chase.
30-Year Fixed-Rate Mortgage Estimates
|Better.com||Bank of America||Chase||Wells Fargo|
Estimates for a $200,000 home purchase with 20% down payment and credit score of 740.
Better.com's rates are comparable but slightly more affordable than traditional lenders due to the lower APR. Over time, these costs add up, and with the addition of points and the absence of an origination fee, borrowers are able to save more by using Better.com. Wells Fargo was the only lender that provided a rate with zero points, resulting in a higher interest rate but lower closing costs. Although Better.com offers lower rates compared to Bank of America and Chase, the difference is not significant.
30-Year Fixed-Rate Mortgage Refinance Estimates
|Better.com||Bank of America||Chase||Wells Fargo|
Estimates for a $200,000 home value with a $150,000 mortgage balance and credit score of 740.
In terms of refinancing, Better.com has a lower rate than all three banks, based on a $150,000 mortgage balance. Better.com offers a much lower APR than Wells Fargo, with the addition of a small percentage of points. The same mortgage products that are available for home purchase are also used for refinancing a home. Based on these rates, Better.com would be the better option to refinance your mortgage.
Better.com Customer Service and Loan Servicing
Customer service at Better.com is delivered through a well-balanced mix of digital convenience and in-person support. Instead of paper documents and phone conversations that prolong the process, Better.com's digital mortgage platform converts the loan application into a quick, self-driven experience where you type details into intuitive online forms. Once you consent to a soft credit pull, Better.com's platform is also able to prefill certain information, such as the details of any existing loans you have.
Better.com's emphasis on automation and technology is supported by a unique approach to the human side of service. Better.com's mortgage experts aren't motivated by traditional commissions: instead, they earn bonuses by receiving high satisfaction ratings from users. In theory, this means that Better.com's mortgage experts will care more about answering your questions than about closing the deal as fast as possible. In another break with industry practice, Better.com will never cold call you if you stop filling out your online forms—although its mortgage experts may reach out by email.
Mortgage-Related Complaints at Major Banks, 2013-2018
|Company||Mortgage Originations||CFPB Complaints||Ratio of Complaints||2017 JD Power Rating|
|Bank of America||1,438,770||41,867||2.91%||767|
Better.com launched just a few years ago, which means there isn't much data about the company in the Consumer Financial Protection Bureau's public complaint database. What little we found indicates that so far, Better.com has stayed ahead of the curve. While major consumer banks experienced complaint rates between 1.3% to almost 3.0%, CFPB complaints about Better.com are nearly nonexistent. This situation will undoubtedly change as more time passes, but for now, Better.com's novel approach to customer service seems to be keeping problems at an extreme minimum.
Even though Better.com is a direct lender, they transfer your loan to a servicing company about 30 days after your loan closes. Better.com deals with processing your application, underwriting, closing and funding your loan. As soon as that is completed, your loan is transferred and the quality of your experience after the initial loan process will depend on those partners. This can lead to issues for you as a consumer, as your permanent servicer might not provide the same kind of guidance offered by Better.com. However, according to Better.com's FAQ page, the company will contact the permanent servicer on your behalf if problems arise.
Available Loan Types at Better.com
Better.com offers purchase loans and refinancing for both conventional and jumbo loan amounts. The company also has a variety of fixed- and adjustable-rate loan options to choose from. Below are the best rates offered by Better.com for the numbers we provided, which include the lowest amount of discount points.
|Mortgage Product||Interest Rate||APR||Points|
Better.com's initial display of rates allows you to tailor the quote to your needs by adjusting the points and credits for each loan type. Taking credits results in higher interest rates, although Better.com's rates are still competitive in relation to traditional lenders. In contrast, paying points reduces your interest rate but leads to a higher upfront cost.
These mortgage products are offered for a full range of properties including single-family homes, town houses and condominiums, whether used as a primary residence or investment property. Currently, Better.com does not offer VA, USDA or construction loans. Better.com has begun offering FHA loans, which increase its potential as a lender option for lower down payments.
Where Can You Get a Mortgage With Better.com?
Since its start in California, Better.com has expanded into 36 states throughout the country and the District of Columbia. These states represent more than half the national market in home loans. The company continues to work on extending its services to more states.
States Where Better.com Operates
- District Of Columbia
- North Carolina
- North Dakota
- New Jersey
- New Mexico
- Rhode Island
- South Dakota
- West Virginia