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Better is a great fit for home buyers and refinancers who are looking for transparency during the mortgage process and a lender that offers competitive mortgage rates. Another value-added perk is that Better closes faster than the industry average. While nearly every mortgage lender is experiencing longer than average closing times with rates so low in 2021, Better's digital experience helps the lender move faster than its competitors. This Better mortgage review will highlight the pros and cons and help you figure out if the lender is right for you.
Best for: Refinancing and seamless online experience
Rating image, 5.0 out of 5 stars.
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Bottom Line
Has the right combination of features and perks, including no origination fees, low mortgage rates, and an online experience that helps homeowners cut their costs while saving time. Case in point, borrowers can secure preapproval in minutes. The lender also offers $150 off closing costs when applying through The Ascent site.
Min. Credit Score
- 620
Min. Down Payment
- 3%
Key Features
- No origination fees
- Instant loan estimates
- 100% online application
- $150 off closing costs for The Ascent readers
Loan Types
- Conventional
- Jumbo
Fixed Rate Terms
- 30y, 20y, 15y
Adjustable Rate Terms
- 10/1, 7/1, 5/1
Full Better mortgage review
This mortgage lender is a good fit for: Homeowners wanting to refinance to a lower interest rate while cutting costs. Better Mortgage offers many of the most popular terms and products, making it a fit for most people. USDA and VA loan borrowers will want to look elsewhere.
Pros
- Low rates
- Low price guarantee
- No origination fees
- Fast pre-approval
- Fixed rate and adjustable rate options
Cons
- Doesn't offer VA or USDA loans
- No customizable terms
Top perks
Low rates and price guarantee
Better mortgage already consistently beats many mortgage lenders' rates, but it's price guarantee ensures the lender will beat competitors. Better will match a competitors offer and attempt to beat it by $100. If the lender can't the $100 is yours to keep
$150 off closing costs
Apply through The Ascent site and receive a $150 discount for closing costs or closing costs for refinancing. This exclusive perk can help you keep more money in your pocket and reduce the cost of already low fees that the lender offers.
No origination fees
Many mortgage lenders charge for the privilege of getting a loan. Better charges no origination fee, helping you save on your overall closing costs, which can range anywhere from 0.5% to as high as 2% depending on the lender.
Quick loan estimates and pre-approval
Better offers both rate quotes and pre-approval letters within minutes, making it easier to shop around for lenders efficiently. Prospective homeowners can also take action faster on a new home purchase in a competitive market. Other lenders can take upwards of a few days to issue a pre-approval letter. Better offers this letter using its automated technology to digitally underwrite your loan so that when you make an offer on a house, you can make your bid more competitive -- sellers will see that you're fully underwritten. In other words, Better's mortgage pre-approval letter can help you stand out since it means it shows you're more financially ready to make such a large purchase.
Lock in your interest rate on demand
Applicants can lock in their interest rate whenever they want during the loan process. Most lenders don't guarantee the rate you get in your initial quote, but Better will hold the mortgage rate for you so you can complete your application with the knowledge that it won't change by the time you close on your home.
100% online application process
Most of the closing process is done completely online (with the exception of signing the final documents). Simply fill out their online application form and submit any necessary documents using their secure system.
Access to a dedicated loan officer
Once you complete the pre-approval process, you'll be assigned a loan officer and will receive contact details. You can contact this person during office hours throughout your loan application process.
Discounts available
Borrowers can receive up to $2,000 in lender credits through the Better Real Estate discount program. To be eligible, you'll need to choose Better Mortgage Corporation as your mortgage lender and a real estate agent who was referred to you by Better.
What could be improved
Availability in all states
Currently, borrowers in Massachusetts, Minnesota, Hawaii, Nevada, New Hampshire, Virginia, and Vermont can't get a mortgage with Better.
Loan product availability
Unfortunately, you won't be able to take out a USDA home loan or VA loan. Plus, this lender doesn't currently offer home equity loans or HELOCs.
Alternatives to consider
If you want to customize your mortgage term: Rocket Mortgage is one of the most well-known lenders in the mortgage space, and it offers an intuitive online application, much like Better. You can also get an instant online approval, which you can use right away to start shopping for homes. The lender offers customization options (applicants can choose a term anywhere from 8 to 29 years) for applicants with a wide range of credit scores.
If you want to avoid origination fees: SoFi Mortgage is another popular mortgage lender worth considering due to their membership discounts and competitive interest rates. Applicants can choose from fixed- or variable-rate mortgages and avoid origination and application fees. SoFi's underwriting also looks beyond your credit score, weighing other factors such as your employment situation, income, and history of on-time payments. You can also put down as little as 10% for your down payment and receive up to $500 in loan processing fee discounts.
How are Better's refinance rates?
Better mortgage refinance rates tend at least match the competition for many people. Better current mortgage rates are 2.750% (2.769% APR). This assumes a sample scenario of someone with a single family home, excellent credit, paying $435 in points, and refinancing a 30-year fixed-rate mortgage at an 80% loan-to-value. Other mortgage lenders are offering rates in the same ballpark, but they tend to charge more out-of-pocket to get that rate. Better is essentially offering similar refinance rates as some competitors, but with lower costs.
How to qualify
Qualifying for a Better mortgage depends on your financial situation and whether you live in a state where the lender offers loans. Underwriters look at the amount of debt you have, your credit score, and other factors to determine the likelihood that you'll pay your mortgage on time.
One of the main factors Better looks at (much like other lenders) is your debt-to-income ratio, or DTI. This number, expressed as a percentage, reflects how much monthly debt you have compared to your gross monthly income. Lenders use it to determine how large a mortgage you can afford.
Better offers loans with DTIs as high as 50% for the most creditworthy borrowers.
In addition, Better offers conventional loans for those who have a FICO® Score as low as 620, but the higher yours is, the lower your interest rate is likely to be.
A Better mortgage is right for you if:
Better is one of the most competitive lenders on the market, considering it offers a faster loan process and fewer fees than most.
Not sure if it's right for you? Here are a few indicators you should go with this lender.
You're refinancing. Better offers some of the most competitive refinancing rates you'll find.
You don't like paying extra fees. Given that a mortgage is probably the largest loan you'll ever take out, you want to save as much money as you can. Better doesn't charge loan officer commissions, nor application, underwriting, or lender origination fees -- so you can keep that money for other housing expenses, such as a moving service or furniture for your new home.
You're seeking a high-quality digital experiences. This lender offers a completely online application process and the ability to underwrite your loan using automated technology. If you know your way around a computer, getting a mortgage from Better can be fast and easy.
About the Author
Sarah Li Cain has been writing financial advice and reviewing financial products since 2015. She has contributed to outlets including LendingTree, Business Insider, Redbook, Bankrate, and the Financial Planning Association.
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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team. The Motley Fool has a Disclosure Policy. The Author and/or The Motley Fool may have an interest in companies mentioned.
