What Better Mortgage Offers
Better Mortgage originates home loans in all 50 states and Washington, D.C. It’s a subsidiary of Better, a digital homeownership holding company whose other subsidiaries sell home insurance, title services, home improvement loans, home inspections and real estate agent services. As a result, you can obtain these services in addition to your mortgage, making Better a convenient, one-stop option for homebuyers.
The lender publishes its best available mortgage rates on its website. You can customize your mortgage rate quote based on ZIP code and loan type without providing any personal information.
In addition to the products listed above, Better also offers a home equity line of credit (HELOC). Like Better’s home loans, you can apply for a HELOC completely online. There are no lender fees, and qualified homeowners can access up to $500,000.
Loan Types
Better Mortgage offers the following types of mortgages:
- Conventional
- Jumbo
- FHA (30-year term; purchase only)
- U.S. Department of Veterans Affairs (VA) loans
- Investment property loans
- Rate-and-term refinance
- Cash-out refinance
- HELOC
Loan Minimum
Better Mortgage doesn’t publicly disclose whether it has a minimum mortgage amount. Some lenders do not offer small mortgage loans, which can make it challenging for people to buy, renovate or refinance less-expensive homes.
Loan Maximum
Loan maximums depend on mortgage type and qualifications. Customers can borrow up to $3 million on a jumbo loan through Better Mortgage, according to the company’s website.
Loan Servicing
Better Mortgage says it initially services borrowers’s loans in conjunction with The Money Source, a subservicing company. At some point, Better Mortgage may sell your loan to an investor and transfer servicing.
Faster, easier mortgage lending
Better Mortgage vs. Rocket Mortgage
Better Mortgage and Rocket Mortgage are nationwide, online lenders that offer mortgage rates below the national average and allow credit scores as low as 580 on FHA loans. Both lenders also offer conventional, jumbo and VA mortgages. Here are some key areas where they differ.
Better Mortgage vs. SoFi
Minimum Borrower Requirements
Here are the basic criteria Better Mortgage requires borrowers to meet.
Minimum Credit Score
You’ll need a credit score of at least 620 for a purchase, rate-and-term refinance or cash-out refinance loan from Better Mortgage. For an FHA loan, you’ll need a credit score of at least 580. For a jumbo loan, you’ll need a credit score of at least 700.
Minimum Down Payment
Better Mortgage requires the following down payment amounts:
- Conventional. 3%
- FHA. 3.5%
- Jumbo. 10%
Maximum Debt-to-Income (DTI) Ratio
The maximum DTI that Better Mortgage allows depends on your loan type and situation. With an FHA or conventional loan, your DTI can be as high as 50%. With a jumbo loan, it can be as high as 43%.
What Fees Will You Pay?
One of Better Mortgage’s selling points is its low fees. Here’s what you can expect to pay if you get your home loan from this company.
Origination Fees
Better Mortgage doesn’t charge a loan origination fee, and, unlike many lenders, it doesn’t charge application, underwriting or processing fees either. That said, lenders with no origination fee often charge borrowers a higher interest rate.
You’ll also still have to pay for third-party services such as a home appraisal and title fees. Better’s subsidiaries sell some of these services, but you aren’t required to work with these companies. You can and should shop around for third-party mortgage services to see who offers the best value in terms of price, quality and speed.
Better Mortgage says it doesn’t pay its loan officers commissions, which is another way the lender is different from its competitors. Loan officers at other lenders typically earn about 1%. The company also says it will match any competitor’s loan offer and credit you $100. If it can’t match it, Better says it’ll give you $100.
Rate Lock Fees
Better Mortgage allows borrowers to lock their interest rate online 24/7. Rate locks are typically valid for 30 days, though some loans may offer a longer time frame.
If your loan doesn’t close before your rate lock expires, you may be able to extend it for a fee. Better says it will pay 100% of the rate lock extension fee if the delay is its fault and will split the cost with you if the delay is a third party’s fault. If it’s your fault, you pay the fee.
Better does not appear to let borrowers float their rate down if rates decrease after locking.
How To Apply With Better Mortgage
To apply for a loan with Better Mortgage, follow these basic steps, which you can complete on the company’s website. You can also call, email or use the 24/7 online chat feature if you need help with your application.
1. Answer basic preapproval questions
You’ll answer a few questions about what you’re looking for (such as purchase, refinance or cash-out refinance loan), where you are in the process and what you’ll be using the home for.
Better says you can get preapproved in as little as three minutes. This initial preapproval is based on self-reported information and a soft credit check, which doesn’t affect your credit score.
2. Work with a loan officer to get a verified preapproval letter
Once you go through the initial preapproval, the company will assign a loan officer to your case and work to get you a verified preapproval letter. Better will perform a hard credit check, review financial documents you submit, and verify certain assets, income and debts.
3. Review your loan estimate
Better will then give you an official three-page loan estimate showing your interest rate, estimated closing costs and other key details. Look over this document line by line and see if you’re happy with the proposal.
What To Do If You Get Turned Down
If Better denies your mortgage, ask your loan officer why. It might be that your income is too low or the bonus income you thought would help you qualify doesn’t count because you haven’t earned it consistently for at least two years. Maybe you need to improve your credit score or pay down some debt. Find out why you were denied so you can improve those aspects of your finances, then reapply.
That said, make sure you’ve applied with several mortgage lenders because one might approve you even when others have turned you down. To get an idea of what you can afford, use our mortgage calculator.
Other options that might be faster but otherwise less appealing include finding a lender that offers non-qualified mortgages or getting a co-signer or co-borrower.
What People Are Saying About Better Mortgage
Better Mortgage’s Better Business Bureau (BBB) rating is 4.15 out of 5 stars based on 951 reviews in January 2023. The BBB has closed 53 complaints about the company in the last 12 months, and 234 complaints in the last three years.
The BBB gives Better Mortgage a B rating. However, this rating isn’t based on customer reviews but on how the company responds to complaints, its time in business, size and other factors.
The Consumer Financial Protection Bureau’s (CFPB) Consumer Complaint Database shows 195 mortgage complaints about Better from January 2020 through January 2023.
Most complaints were about applying for, refinancing or closing on a conventional mortgage. The company only provided a timely response to 77 complaints; it did not provide a timely response to 118 complaints. This is a significantly worse response rate than what we’ve typically seen among the lenders we’ve reviewed—most lenders provide a timely response to complaints. It’s important to note that the CFPB does not verify the accuracy of consumers’ complaints.
Alternatives to Better Mortgage
If you’re looking to shop around with different companies, Better Mortgage ranks highly on Forbes Advisor’s list of best online mortgage lenders. Here you can check out and compare Better Mortgage with other online mortgage lenders to ensure you’re picking the right lender for you.
Methodology
We graded Better Mortgage based on elements that have a meaningful impact on the cost of the mortgage, including borrower requirements, loan options, ease of applying for a mortgage and the time it takes to fully approve a borrower once an application is submitted. We gave bonus points if a lender offers special rate discounts or a loan program (not offered by the government) meant to help borrowers with no or low down payment, or a low income.
Our scoring method is based on the following categories:
- Interest rate: 20%
- Loan options: 20%
- Timeliness: 20%
- Ease of access: 20%
- Customer service experience: 20%
- Bonus points: 5
While there are certainly more features that lenders offer, we chose not to include others in our scoring in order to bring forward lenders that have the most competitive rates and are among the most accessible for borrowers of all financial backgrounds.
We believe our focus on affordability, accessibility and key features that can impact the homebuying process (like closing timelines and caliber of customer service) reflects consumers’ top priorities when comparison shopping for mortgage lenders.
