Better Mortgage Review: Faster Approval for Comparable Rates

Better Mortgage Review: Faster Approval for Comparable Rates

Better Mortgage lets borrowers tap into a transparent lending process with comparable mortgage rates and fast approval using its 24/7 online service. However, Better Mortgage doesn't offer FHA, VA or USDA loans and only serves 13 states and the District of Columbia.

Good for

  • No origination fees
  • Faster loan process
  • 24/7 online-only system lets you manage application at your convenience

Bad for

  • Doesn't offer FHA, VA, USDA loans and home equity lines of credit (HELOCs)
  • Only covers 13 states and D.C.
  • No brick-and-mortar service locations

Editor's Rating

4.0/5.0

Better Mortgage 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 Mortgage Review: Faster Approval for Comparable Rates

Better 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 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 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). You can access this information at any time rather than having to go to your loan officer if you missed any information. Still, there are loan officers available to provide support and answer any questions if necessary.

After processing your loan and securing funding, Better Mortgage 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 Mortgage is only offered in 13 states and the District of Columbia so far, which is limited compared to other online mortgage lenders including, Quicken Loans and SoFi. However, after securing $15 million in additional financing, Better Mortgage has been able to improve its lending process and offer competitive rates in more states.

How Does Better Mortgage Compare?

Better'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 Mortgage using rates based on a 30-year fixed-rate mortgage. In addition to not charging origination fees, Better 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 MortgageBank of AmericaChaseWells Fargo
Interest Rate4.00%4.00%4.00%4.25%
APR4.03%4.19%4.09%4.36%
Points0.270.840.250.00
Monthly P+I$764$764$764$787

Estimates for a $200,000 home purchase with 20% down payment and credit score of 740.

Better'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 Mortgage. 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 offers lower rates compared to Bank of America and Chase, the difference is not significant.

30-Year Fixed-Rate Mortgage Refinance Estimates

Better MortgageBank of AmericaChaseWells Fargo
Interest Rate4.00%4.00%4.00%4.38%
APR4.01%4.19%4.10%4.45%
Points0.100.900.250.00
Monthly P+I$716$716$716$749

Estimates for a $200,000 home value with a $150,000 mortgage balance and credit score of 740.

In terms of refinancing, Better Mortgage has a lower rate than all three banks, based on a $150,000 mortgage balance. Better Mortgage 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 Mortgage would be the best option to refinance your mortgage.

Customer Service and Mortgage Servicing

Customer service at Better 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'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's platform is also able to prefill certain information, such as the details of any existing loans you have.

Better's emphasis on automation and technology is supported by a unique approach to the human side of service. Better's loan officers aren't motivated by traditional commissions: instead, they earn bonuses by receiving high satisfaction ratings from users. In theory, this means that Better's loan officers will care more about answering your questions than about closing the deal as fast as possible. In another break with industry practice, Better will never cold call you if you stop filling out your online forms—although its loan officers may reach out by email.

Mortgage-Related Complaints at Major Banks, 2013-2018

CompanyMortgage OriginationsCFPB ComplaintsRatio of Complaints2017 JD Power Rating
Better Mortgage6,20930.05%-
Chase1,221,17219,9121.63%764
Wells Fargo2,583,13133,8621.31%745
Bank of America1,438,77041,8672.91%767

Better Mortgage 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 has stayed ahead of the curve. While major consumer banks experienced complaint rates between 1.3% to almost 3.0%, CFPB complaints about Better are nearly nonexistent. This situation will undoubtedly change as more time passes, but for now, Better's novel approach to customer service seems be keeping problems at an extreme minimum.

Even though Better Mortgage is a direct lender, they transfer your loan to a servicing company about 30 days after your loan closes. Better 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 Mortgage. However, according to Better's FAQ page, the company will contact the permanent servicer on your behalf if problems arise.

Home Loan Products at Better Mortgage

Better Mortgage 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 Mortgage for the numbers we provided, which include the lowest amount of discount points.

Mortgage ProductInterest RateAPRPoints
30-year FRM4.00%4.03%0.27
20-year FRM3.88%3.92%0.33
15-year FRM3.50%3.54%0.24
10/1 ARM4.13%4.17%0.01
7/1 ARM4.00%4.14%0.07
5/1 ARM4.00%4.19%0.24

Better'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'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 does not offer FHA, VA, USDA or construction loans.

Where Can You Get a Mortgage With Better Mortgage?

Since its start in California, Better has expanded into 13 other states throughout the country and in the District of Columbia. These states represent more than half the national market in home loans. Recently, the company has been working on extending its services to more states, including Tennessee and Michigan.

States Where Better Mortgage Operates

  • Arizona
  • California
  • Colorado
  • Connecticut
  • District of Columbia
  • Florida
  • Georgia
  • Illinois
  • New Jersey
  • North Carolina
  • Oregon
  • Pennsylvania
  • Tennessee
  • Texas
  • Washington

How Does Better Mortgage Compare to Today's Mortgage Rates?

If you'd like to get a sense of how other mortgage companies compare to Better Mortgage, see the table below to discover alternative mortgage lenders.

LenderAPRMonthly PaymentLoan Fees
Citibank, N. A.5.304%$871.18$3,190.00Inquire Now
HomeDirect Mortgage5.125%$871.18$0.00Inquire Now
Ally Bank5.146%$871.18$385.00Inquire Now
Flagstar Bank5.168%$871.18$771.00Inquire Now
LenderAPRLoan Fees
Citibank, N. A.5.304%$3,190.00Inquire Now
HomeDirect Mortgage5.125%$0.00Inquire Now
Ally Bank5.146%$385.00Inquire Now
Flagstar Bank5.168%$771.00Inquire Now

Rates assume a home purchase of $200,000 in New York with a 20% down payment and credit score of 740. Estimates include origination fees and points but don't include other closing costs.

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