Better.com is perfect for homebuyers and refinancers who put priority on both transparency and competitive rates. They are an online lender whose application process is entirely done online.
In this review, I will talk about everything you need to know about Better Mortgage and help you decide whether it is the right online mortgage lending platform for you.
Minimum down payment: 3%
Minimum credit score: 580
Loan Products/ Mortgage Offers: Fixed-rate mortgage, Adjustable-rate mortgage, Jumbo mortgage, FHA mortgage, and Fannie Mae “HomeReady” mortgage
Also known as Better.com or Better, Better Mortgage is an online lending platform launched in 2014 and currently based in New York. Better.com provides loans for the purchase or refinancing of a house. The entire mortgage process can be done online unlike other lenders.
Better Mortgage is one of the few lenders who always provide their customers with lower mortgage rates or closing costs than their rivals.
Apart from a lower mortgage rate, Better also provides significantly lower fees, even excluding the origination fee which is about 1& of the total loan amount.
What’s more, they have a best price guarantee, promising their customers that they will consistently match their competitors’ rates, otherwise they will give them a cash reward of $1,000.
Of course, some fine print comes along with this promise.
You can check out their interactive mortgage tools in their web site to help you determine the best mortgage for you.
Better.com offers refinance rates that are similar to their mortgage rates. They seem to be at the same level or marginally smaller than most major mortgage providers.
You still need to apply, though, to check whether you’re eligible for the advertised refinance cost. Depending on a number of factors such as your credit score, loan size, and other related variables, your own refinance rate could differ, either higher or lower than what is on Better.com.
Better Mortgage (Better.com) also has a loan program called “HomeReady,” intended to assist borrowers who are low-income earners who have limited cash for a down payment.
It is important to mention that Better.com can be a good go-to lender for those with high levels of debt. At times, they would lend with DTI ratios at 55 percent depending on certain conditions. That’s quite liberal considering that most traditional loans would cap at 43%.
Better.com does not have a comprehensive range of mortgage products. They lack the USDA and VA loans which most mortgage lenders have. This means they will not be good option for certain borrowers.
Other loans that are not part of Better.com’s mortgage products are:
On the other hand, they do provide home mortgage options for investment properties. And they have low-payment incentives for owner-occupied purchases that allow eligible buyers to buy as little as 3% of the purchase price down.
Better Mortgage operates, in some respects, like most lenders. It rates loans on the basis of the house price, down payment, credit score and finances. So you’re going to have normal monthly mortgage payments.
The main difference lies on processing mortgage loans and refinancing them completely online. So the process tends to be simpler and smoother.
Additionally, Best does not incur lender fees, meaning the closing costs could be lower than most mortgage providers.
The entire premise of Better.com is an end-to-end online experience. So you can use your handset, tablet, or other gadget to:
In case you have trouble with any of the steps above, you can always reach a loan officer by phone. Or you can use the Better web site to arrange a schedule for them to contact you.
Generally, Better is trying to keep all their processes online. This approach saves the business time and money—and these savings ultimately benefit the borrowers.
Better.com is saying that your home loan can be closed in as early as 14 days which is pretty fast considering that the average mortgage or refinance would be closed in between 30-70 days.
Better also pointed out that, on average, their clients saved $3,557 for each loan payment in 2018. Savings can, of course, differ by client. But it’s worth comparing prices and costs to see if Better is compatible with you.
Better.com’s Best Price Guarantee states that:
If you think another lender has a more competitive price, send us their loan estimate within 3 business days from the date on the loan. If we can’t beat it by at least $1000, we’ll give you $1000 in cash. This isn’t a marketing ploy or a flash sale. It’s simply our promise to you.”
At face value, this sounds like a really good deal. But it comes with some fine print.
So, how does the Best Price Guarantee actually work? If you were given the same rate by Better and Wells Fargo, but Wells’ closing costs were cheaper, Better would either match Wells’ costs or issue a $1,000-check to you.
Though this sounds simple, collecting it from Better isn’t. You need to close your mortgage using the same firm and the very same loan deal you used to contest Better’s pricing. And within the 30-day closing, you have to provide proof of your funded loan to Better.
So in case there are any changes in the loan amount or sales price, or perhaps you’ve switched loan programs, or your interest rate gets locked in a different rate during the loan process, Better’s $1,000- deal will become invalid.
Overall, there are hidden conditions surrounding the $1,000-deal. Point is Better is quite confident about their pricing that they are willing to strike a deal with you.
Better Mortgage qualification is dependent mainly on two things, your financial status and the state where Better loans are offered.
They will check some factors such as your credit score and existing obligations to see if you can pay back your loan on time.
Your DTI or debt-to-income ratio is one major factor they will definitely check. This indicates your monthly debt against your gross monthly income and much like other lenders, Better will use it to come up with the loan amount and monthly payment you can actually afford.
For creditworthy borrowers, they have offers with DTIs as high as 50%.
Also, for those who have a FICO Score of as low as 620, they have the conventional loans for you. But note that your interest rate likely gets lower as your credit score gets higher.
Better.com is one of the industry’s competitive lenders today. They have a better streamlined lending process and fewer fees than most of their competitors.
If you are not sure, below are some of the things why you will likely opt for this lender:
Better beats most of its competitors because of their lower mortgage rates and fewer charges or fees. The price guarantee, though, shows how confident Better is with their pricing that they are willing to cut you a deal.
In this $1,000-deal, Better will try to beat the offer of a competitor. If they can’t, you get to keep the money. Who wouldn’t take this chance, right?
In just a few minutes, you can get your loan estimates and pre-approval documents. Most lenders in the market issue these pre-approval letters within days.
Better gives them to you in minutes. This is made possible by the automated technology they use to underwrite your loan digitally. In this way, you can make more competitive bids when you are making an offer on a house because you are fully underwritten.
Simply put, Better positions you to stand out with their quick pre-approval mortgage letter to prove to sellers that you can invest on such large real estate purchase.
With Better, interest rates can be locked in anytime during the mortgage process. This means that Better can hold that rate until you close on your home to ensure it will not change during the entire application process.
Other lenders do not offer this perk to their applicants.
Better.com offers a highly digital lending platform.
Besides the final documents signing, everything else in the closing process is entirely online. This online experience is best suited for borrowers who are comfortable with a computer or any mobile device.
You just need to fill out their application form online and then submit all required documents via their secured system.
You get a dedicated loan officer as soon as you finish completing the pre-approval process. The loan officer’s contact details will be provided to you so you can reach out to this person during the entire mortgage process.
Up to $2,000 in lender credits are available to borrowers via the Better Real Estate discount program. You can access this benefit if you make Better as mortgage lender and choose a real estate agent referred by Better.
Better Cover is Better.com’s in-house insurance provider, which helps you to search online for insurance policies together with your Better Mortgage application.
Better’s products and services are not available in all states including Nevada, Virginia, New Hampshire, Vermont, Hawaii, Minnesota, and Massachusetts.
Currently, Better does not offer USDA loans nor VA loans. They also do not offer HELOCs or home equity loans. These home equity loans enable homeowners to borrow against their home equity.
Yes, they do like all other lenders.
When conventional loans reach 78% loan-to-value, your PMI will be automatically cancelled. You may also avail FHA loans (which requires mortgage insurance) from Better.
FHA mortgage insurance covers 11 years or the duration of the loan, depending on your down payment.
It’s always a good idea to compare prices and products of mortgage lenders so you can identify which suits your needs best. Alternatively, you can compare rates via Bankrate.
Here are two other alternatives to Better that I think are worth considering:
Rocket Mortgage is one of today’s most popular mortgage lenders and provides a highly digital online experience similar to Better.com. You also get immediate online approval which makes you stand out when you shop for homes.
Borrowers with various credit scores are offered options for customization and can pick a term from 8 to 29 years of age.
Another potential good mortgage lender is SoFi Mortgage. They offer competitive rates and membership discounts.
Fixed rate and variable rate mortgages are two options that borrowers can choose. With SoFi, they can also avoid paying for application and origination fees.
SoFi does not only look into your credit standing but also gauge on other variables such as income, employment, and on-time payment history.
Down payment can be as low as 10% plus you can get as much $500 discount in loan processing fees.
Lending flexibility: 3.5
Customer service: 5.0
Ease of application: 5.0
Online experience: 4.5
A Better spokesperson said:
“Our mission is to change the way Americans buy and refinance their home by delivering lower rates, faster closing times and a radically transparent, technology-driven process.
“We prioritize the consumer experience through an online process, with instant loan estimates, honest rate quotes and 24-hour verified pre-approvals, all complemented by support from non-commissioned loan officer.”
And they do uphold this promise for many.
If you’re a tech-first shopper who hates paperwork, Better’s business model could be right for you.
There’s a couple of downsides though with an online mortgage lender. Since Better does business nearly entirely online, there are no branches for face-to-face contact.
And, since Better.com is basically a young company, being founded only in 2014, the firm is still working out its mortgage products. They are not yet licensed in all states and do not carry VA or USDA loans which are major loan types that a lender should offer.
Better also does not have manufacture home mortgage loans, buildings with five or more units, cooperatives, or mixed-use properties. This makes Better not suitable for everyone.
Overall, Better Mortgage is a good option if you value low rates, fewer fees (application fee, origination fee, etc.), quick and streamlined application process which tech-savvy people love.
But even with their Best Price Guarantee scheme, Better’s range of products does not include VA or USDA loans which could be a major reason why some would not choose them.
Being a young company established in 2014, they are still in the process of developing their services and working out getting licensed in every state.
Bottom line is that the best way to determine which mortgage lender is best for you is to check on the products and services they offer and compare their rates and fees with other lenders.
What if you never needed to go to a crumby lender or lenders ever again? What if you never had to stress about getting an application rejected because of a bad personal credit score?
What we’re about to talk about real quick is a business model that will give you funding Sofi could only dream of providing for you.
We’re of course talking about…
With digital real estate, you don’t have to worry about a credit score or your personal credit.
Hell, you don’t even have to worry about going to lenders about a high credit limit in general because your business expenses are virtually non existent.
The reason why most people need lenders is because they are going to start a company that operates in a physical brick and mortar that has small margins.
We hate to tell you this…
But because of the current political climate and all this talk of a “new normal”, going into the brick and mortar space isn’t a good option for any business idea right now.
What you should really look into is the digital real estate model.
All you have to do is build a simple website, do a little on and off page SEO and presto, you’re at the top of google!
Ok, cool, but what’s a website on the top of google worth anyway?
The trick to get is worth a lot of money is to build a site for call in jobs like tree service or roofing.
Let’s take a roofing for example…
The average roofing job is worth $5,000-$10,000, and a lead is worth $500-$1,000 or 10%. This means that if you generate 10 calls or $50,000 of revenue, you could earn $5,000 from that site for the month!
That is high levels of real estate rent numbers you’re pulling in!
Now imagine just how easy it is to scale this business out…
You can build these sites in less than a day…we know because we’ve tried.
Could you imagine what having just 10 of these sites would look like for your monthly income?
Talk about never having to worry about a credit score or going to lenders ever again.
Ok, but how easy is it to get clients for something like this?
Super easy, in fact our team has tried it!
Business owners all over the country are hungry for the chance at more business right now. If you can be the one to consistently bring jobs to them each month, they’ll have no problem throwing 10% your way!
Even if you have a brick mortar business right now, you could use this to give it the kind of funding Better Mortgage couldn’t give you if your credit score isn’t high enough.
In fact, many people who joined the training course about digital real estate started out just like that!
They wanted to get more inbound clients for their company so they started with building a website and ranking it on google locally.
After just a few months they had calls rolling in for their company that were producing more than the capital Better Mortgage would have been able to provide for them!
Soon after seeing how profitable it was for them, they decided to build more of these sites in different areas and markets and take a little sliver to deliver on all the jobs they were getting for people.
If you have a bad personal credit score and don’t think a lender or lenders like Better Mortgage offers will approve your application we recommend checking out this digital real estate course!
You get hands on training that will walk you through step by step of how to build these assets out!
Not to mention a great group that is there to answer questions you might have 24/7.
If you’re looking to get funding fast without having to deal with all the headaches of an application, low personal credit score, funding manager, and the occasional shady lender…
All rights reserved 2020
Share This Article: