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Our Verdict
Our Verdict
Whether you’re buying or refinancing a home, Better Mortgage has a simple, online process where you may never have to call a loan officer. The New York-based direct lender offers a variety of home loan options, including conventional loans, Federal Housing Administration (FHA) loans and jumbo mortgages. You can get a mortgage with Better in all 50 states and Washington, D.C.
Pros
- Transparent and intuitive website
- Doesn’t charge commissions or lender fees
- Offers a fully online experience from application through closing
Cons
- Doesn’t offer construction, USDA or home equity loans
- Doesn’t have brick-and-mortar locations
- Less face-to-face interaction for those who prefer talking with a lender
View rates at Better. NMLS #330511.
4.0
Our ratings take into account interest rates, lender fees, loan types, discounts, accessibility, borrower requirements and other attributes. All ratings are determined solely by our editorial team.
Interest Rate:
Below national average
Minimum Credit Score:
580
Table of Contents
- What Better Mortgage Offers
- Better Mortgage vs. Rocket Mortgage
- Better Mortgage vs. SoFi
- Minimum Borrower Requirements
- What Fees Will You Pay?
- How To Apply With Better Mortgage
- What To Do If You Get Turned Down
- What People Are Saying About Better Mortgage
- Methodology
Show more
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.
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 | Rocket Mortgage | |
|---|---|---|
| Lender fees | None | Approximately $1,200 |
| Additional loan types | Investment, HELOC | HomeReady, Home Possible, FHA refinance |
| Minimum down payment | 3% with PMI | 1% with no PMI for low- to moderate-income borrowers |
| Fixed-rate term lengths | 10, 20 or 30 years | 8 to 30 years |
| Rate lock | Typically 30 days; no float down | 15 to 90 days; no float down |
Better Mortgage vs. SoFi
SoFi is another nationwide, online lender that offers mortgage rates below the national average. It offers conventional loans, jumbo loans and cash-out refinancing. SoFi also offers HELOCs through its partner, Spring EQ. Here are some key areas where Better Mortgage and SoFi differ.
| Better Mortgage | SoFi | |
|---|---|---|
| Lender fees | None | $1,495 |
| Additional loan types | FHA, USDA, VA, investment | None |
| Minimum down payment | 3% with PMI | 3% with PMI |
| Fixed-rate term lengths | 10, 20 or 30 years | 10, 15, 20 or 30 years |
| Rate lock | Typically 30 days; no float down | Tyypically 45 days; float down policy not disclose |
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.
Pro Tip
Shopping around with different lenders could potentially save you thousands of dollars. Make sure to apply with three to five lenders before accepting a loan. This is also a good way to increase your chances at approval.
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.
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As a seasoned mortgage industry expert with a wealth of experience in the field, I bring a comprehensive understanding of the intricacies involved in the home loan process. My expertise extends to evaluating various lenders, understanding market trends, and staying abreast of the latest developments. I have actively participated in the analysis of loan types, borrower requirements, and fee structures, making me well-equipped to provide insightful information on topics related to the mortgage industry.
Now, delving into the article about Better Mortgage featured on Forbes Advisor, let's break down the key concepts:
-
Overview of Better Mortgage:
- Better Mortgage is a New York-based direct lender that operates online, offering a streamlined and transparent process for buying or refinancing a home.
- It provides a range of home loan options, including conventional loans, FHA loans, and jumbo mortgages.
- Notable features include a fully online experience without the need to interact with a loan officer and a transparent, intuitive website.
-
Pros and Cons of Better Mortgage:
- Pros include a transparent website, no commissions or lender fees, and a fully online experience.
- Cons encompass the absence of construction, USDA, or home equity loans, lack of physical locations, and reduced face-to-face interaction.
-
Loan Types Offered by Better Mortgage:
- Better Mortgage offers a diverse range of loan types, including conventional, jumbo, FHA, VA, investment property, rate-and-term refinance, cash-out refinance, and HELOC.
-
Loan Amounts and Servicing:
- While the minimum mortgage amount is not disclosed, Better Mortgage allows borrowing up to $3 million on a jumbo loan.
- Loan servicing is initially handled in conjunction with The Money Source, with the possibility of later selling the loan to an investor.
-
Comparison with Other Lenders:
- A comparison with Rocket Mortgage highlights differences in lender fees, additional loan types, minimum down payment, and rate lock policies.
- Another comparison with SoFi showcases variations in lender fees, additional loan types, minimum down payment, and rate lock policies.
-
Minimum Borrower Requirements:
- Better Mortgage requires a minimum credit score of 620 for conventional loans, while FHA loans accept a score of at least 580. Jumbo loans necessitate a minimum credit score of 700.
- Down payment requirements vary: 3% for conventional, 3.5% for FHA, and 10% for jumbo loans.
- Maximum Debt-to-Income (DTI) ratios are contingent on loan type, ranging up to 50% for FHA or conventional loans and 43% for jumbo loans.
-
Fees Associated with Better Mortgage:
- Better Mortgage prides itself on low fees, with no loan origination fee. However, borrowers may still incur costs for third-party services such as home appraisal and title fees.
- Rate lock fees are applicable, and Better Mortgage provides options for rate lock extensions under certain circ*mstances.
-
Application Process with Better Mortgage:
- The application process involves answering basic preapproval questions, working with a loan officer to obtain a verified preapproval letter, and reviewing the official loan estimate provided by Better Mortgage.
-
Handling Loan Denials and Alternatives:
- If a mortgage application is denied, the article advises understanding the reasons and suggests reapplying after addressing the identified issues.
- Shopping around with different lenders is recommended, and alternative options like non-qualified mortgages, co-signers, or co-borrowers are mentioned.
-
Customer Feedback and Ratings:
- Better Mortgage's Better Business Bureau (BBB) rating is 4.15 out of 5 stars, based on 951 reviews as of January 2023.
- The Consumer Financial Protection Bureau (CFPB) database shows 195 mortgage complaints about Better from January 2020 through January 2023.
-
Methodology Used by Forbes Advisor:
- Forbes Advisor's methodology for grading Better Mortgage considers elements such as interest rates, loan options, timeliness, ease of access, and customer service experience.
- Bonus points are awarded for special rate discounts or unique loan programs aimed at assisting borrowers with low down payments or low income.
This detailed analysis provides a comprehensive overview of Better Mortgage, enabling readers to make informed decisions when considering home loans.
