The Yahoo view: Better combines several home-buying services, including rapid loan approval, insurance, real estate, settlement services, and more, into a consolidated digital experience. It’s a lender worthy of comparison.
Better Mortgage is a solid contender in the digital mortgage space. But with a below-average customer service rating and a focus on speedy loan commitments and closings, it may be best suited for borrowers who live in a competitive real estate market and have been down the home-buying road before.
First-time home buyers with limited savings might seek a lender focusing more on borrowers with low down payments. Better seems to be appealing to home buyers with some cash saved or home equity to put into the deal.
Key benefits
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A “One Day Mortgage” offer promises a loan commitment within 24 hours of submitting paperwork and a rate lock.
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Claims to close loans “17 days faster than the industry average.”
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Offers loans, insurance, real estate, settlement services, and more into a consolidated digital experience.
Need to know
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Published interest rates are shown for borrowers with a 20% down payment, who pay closing costs with cash, have a DTI below 35%, and a credit score of 760 or higher.
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A pitch on the website says, “No unnecessary fees.” There is no disclaimer explaining what the “necessary” fees are. We find that kind of language to be meaningless and, frankly, a little irritating.
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A below-average rating for customer satisfaction, according to the latest J.D. Power Mortgage Origination Satisfaction Study.
Better Mortgage for first-time home buyers
Compared to other lenders, Better is pretty low-key in appealing to first-time borrowers.
They don’t promote low down payment programs, and we couldn’t find a mention of the . Better does offer , which are famous for requiring no down payment, but that product is simply listed among its other loan options.
Instead, Better focuses on its speed in issuing a loan commitment and a digital loan process.
Better Mortgage for home equity lending
For homeowners who aren’t ready to move but would like to access some of the equity in their home, Better Mortgage offers two options:
With the recently higher mortgage rates, anyone who’s financed a house in the last 24 years or so probably wouldn’t be looking to refinance a mortgage at a higher rate. That’s the last time mortgage rates were edging higher than 8%. So, a cash-out refinance isn’t likely a great option.
But a HELOC is. You draw the money you need from a line of credit, so you’re only paying interest on the balance you owe. And Better allows you to draw up to $500,000, or 90% of your home’s value.
Tip: One downside of the Better HELOC is that you must draw at least 75% of your home’s value with a minimum of $50,000. That greatly degrades the flexibility of only paying interest on the balance you owe. For example, what if you have $50,000 worth of equity but only want to draw $10,000? With Better’s HELOC, you’re out of luck.
Better Mortgage rates
Sample home loan interest rates are shown at the bottom of the home page. The fine print reveals that the three fixed-rate loans (15-year conventional and 30-year conventional and FHA) are all reduced with two discount points or more, with borrowers having a 760 or higher FICO score and a .
To fine-tune those rates to be a little closer to your situation, click on the “See your rates” button and answer some questions. Unfortunately, you’ll have to provide an email address and sign into an account to get your answer. We stopped there.
Applying for a mortgage with Better Mortgage
Once you try to customize your mortgage rate, you’ll be frequently asked if you “want to continue with your pre-approval?” So, there’s no lack of opportunity to proceed with an application.
And conveniently, there seems to be a phone number on the screen most of the time. Customer service is available from 8 a.m. until 9 p.m. Eastern on weekdays and 9 a.m. to 9 p.m. on weekends.
Better Mortgage home-buyer tools and calculators
As for learning tools and calculators, Better gives the impression that they are loaded with such resources. A graphic on the home page says, “The tools you need to make that next step,” with a button that urges you to “use our calculators.”
All we initially found was the prerequisite mortgage payment calculator, but it was intuitive and easy to use. You’ll also see a debt-to-income explainer that demystifies one of the bedrocks to home loan approval.
However, the tools page doesn’t reveal all the calculators on Better. See the “at the bottom of the page, and you’ll discover Affordability, Rent vs. Buy, HELOC payment, HELOC vs. Cash-out refinance, and other calculators that for some reason weren’t listed on the tools page.
On the day of our research, a chat tool was visible on the right of our screen. We asked, “Do you have jumbo loans?” We got a prompt, straight-to-the-point “yes” in response. Very nice.