One of the first “fintech” mortgage lenders that came into existence in recent years was Better Mortgage.
Launched in 2014, they managed to fund more than $100 billion in home loans and at one point cracked the top-25 list nationally, despite being a very young company.
However, like any other company, they’ve also had challenges, including the infamous mass firing of employees during a Zoom call back in 2021.
They’ve also made a lot of changes over the years, going from a no fee, commission-free loan officer arrangement to quite the opposite.
But they may still be worth a look if you’re looking for speed and convenience, especially if their mortgage rates best their competitors.
Jump to Better Mortgage Review topics:
– How to Apply with Better Mortgage
– Better One Day Mortgage
– Loan Programs Offered by Better Mortgage
– Better Mortgage Lender Fees
– Better Mortgage Rates
– Better Price Guarantee
– Where Better Mortgage Is Licensed
– Better Mortgage Reviews
– Better Mortgage Pros and Cons
– Better Mortgage vs. Rocket Mortgage
Better Mortgage Used to Be a Top-25 Lender
- Direct-to-consumer mortgage lender
- Founded in 2014, headquartered in New York City
- Offers home purchase loans, mortgage refinances, and HELOCs
- Claims to offer a 100% online loan process that is mostly paperless
- Currently licensed in 50 states and the District of Columbia
- Funded $2 billion in home loans in 2023
- Also operates a settlement company and insurance agency
First a little history. The company was born out of a bad experience by its founder Vishal Garg, who attempted to secure a mortgage for his own family in Manhattan back in 2012.
He found the process antiquated, confusing, inefficient, and riddled with problems. His mortgage experience was so bad that he launched Better in 2014.
The goal was to completely re-engineer the home loan process and truly digitize it at the same time.
They also introduced more transparency by eliminating lender fees and posting daily mortgage rates right on their website.
A year later, they decided to purchase a small mortgage originator based in Silicon Valley by the name of Avex Funding, which got them established quickly.
Better said it funded its first 100%-digital loan without a single phone call just months later.
Today, the company is licensed to do business in all 50 states and D.C., and funded nearly $50 billion in 2021, making them a top-25 lender nationwide at the time.
However, business has since dropped off considerably, with just $2 billion funded in 2023.
Aside from being a mortgage lender, the company also operates Better Services, which offers title insurance and other settlement services.
And an insurance agency known as Better Insurance, which is a collaboration between tech company Sure and Toggle, a Farmers Insurance company.
This makes them a one-stop shop for a home buyer who can get a mortgage, insurance, and other third-party services from one company.
How to Apply with Better Mortgage
- They offer a fully-digital home loan experience powered by the latest technology
- You can generate a basic pre-approval in as little as 3 minutes without a human
- And a verified pre-approval in about 20 minutes after sharing supporting documents
- They currently offer a hybrid e-closing for refinance customers and are working to make more of the process completely paperless and remote
One thing Better Mortgage excels at is technology. They make it easy to apply for a mortgage with the press of a few buttons, literally.
To begin your application, simply head over to their website and click on “Apply Now.” They’ll ask you a some basic property questions, then ask for your email so you can view personalized rates.
It’s also possible to see today’s mortgage rates by clicking on the “Rates” tab, then selecting purchase or refinance.
Assuming you like what you see pricing-wise, it’s possible to formally apply without speaking to a human, or leaving your couch. They say the entire application can be filled out online.
They offer two types of pre-approval letters, including a “basic” one and a “verified” one. The basic one is essentially a pre-qualification.
The verified one requires the uploading of real documents like tax returns, pay stubs, and bank statements (along with a credit pull).
Get Pre-Approved in as Little as Three Minutes
You can complete the basic mortgage pre-approval in under three minutes, and a verified one in about 20 minutes, then it may take 24 hours for a human to review it.
Because they rely so much on technology, you might be able to link some of your accounts without having to gather the paperwork, and you can e-Sign disclosures.
Once submitted, a loan officer will get in touch and serve as your point of contact going forward.
You’ll also be able to access the online customer portal 24/7 to complete any tasks, lock your loan, and check loan status.
In terms of closing times, Better says it usually takes 3-6 weeks after the rate is locked, which is fairly standard.
Speaking of closing, they offer hybrid e-closings for refinance customers who use one of their title partners.
Better One Day Mortgage
In a bid to “revolutionize” the home buying process, Better has launched “One Day Mortgage.”
It allows applicants to receive a fully-underwritten, mortgage commitment letter within 24 hours.
As you what that actually means, it’s a conditional underwriting approval. So you can quickly find out if you’re conditionally approved for a mortgage with Better.
But this conditional (notice I keep saying conditional) underwriting determination may not result in a final underwriting approval if circumstances change. Or the unexpected comes up.
And the name implies that it’s subject to satisfying loan conditions for final approval.
Still, it means an underwriter has looked at your file and given it the initial green light, which is better than your standard pre-qualification or pre-approval.
One Day Mortgages are available in all 50 states, for salaried (W-2) employees and who make a down payment of at least 3% on a conforming mortgage backed by Fannie Mae or Freddie Mac.
The company has already piloted the program and processed over $50 million in One Day Mortgage commitments, with the average customer receiving a commitment letter in 12 hours.
I looked at the terms and conditions and apparently “qualified customers who successfully provide the Required Documents within the Required Tasks Completion Period will receive $1,000 in the form of lender credits.”
So that’s something you should ask about if applying with Better. For the record, I didn’t see it on the main page discussing One Day Mortgage.
Better Offers Conventional, Jumbo, VA Loans, and FHA Loans
- You can get a conventional, jumbo, FHA, or VA loan
- They also offer second mortgages via their new digital HELOC
- They do not originate USDA loans at this time
- Both home purchase loans and refinances are available
- Fixed-rate and adjustable-rate options
Better offers both home purchase loans and mortgage refinances, including rate and term, cash out, and Texas Cash Out Home Equity Loans.
If you use them for a home purchase, you can take advantage of their “Better Closing Guarantee,” which will put $2,000 in your pocket if delays on their end prevent you from closing on time.
They also recently launched the Better Appraisal Guarantee, which protects you from a low appraisal and makes your offer stand out to sellers.
When it comes to loan types, Better offers conventional loans, jumbo loans, FHA loans, and VA loans.
This includes streamline refinance options, such as FHA streamlines and the VA’s IRRRL, which they just launched on Veterans Day 2024.
They do not offer USDA loan or construction loans.
However, they do offer mortgages for different property and occupancy types, including condos/townhomes and multi-unit investment properties.
You can get both a conforming or jumbo loan amount, and a fixed-rate mortgage or an ARM.
With regard to specific loan programs, they offer a 30-year fixed, 20-year fixed, 15-year fixed.
In the past, they also offered a 10/6 ARM, 7/6 ARM, and 5/6 ARM. It’s unclear if those will return at some point.
They also offer a so-called digital HELOC with loans amounts up to $500,000, and CLTVs to 90%, along with a home equity loan.
And they recently launched the “Better Home Card,” which is a personal line of credit up to $50,000.
You get one year to spend and 3-5 years to pay back whatever you use, with fixed rates as low as 7.99% APR.
This is enough to suit most customers, though those with more specific needs or complicated loan scenarios may need to look elsewhere.
Better Used to Not Charge Any Lender Fees
- Better had a huge leg up on the competition due to their lack of lender fees
- In the past they didn’t charge an origination fee or fees for things like underwriting or processing
- This made it harder for other lenders to compete with them, especially since they close home loans faster via the latest technology
- But they now charge a $995 origination fee on most loans
While Better offers the latest technology to help speed you through the loan process, they used to separate themselves from the crowd by eliminating lender fees and commission-based loan officers.
Instead, Better relied upon the fee their investors paid them when they sold off the loan on the secondary market. Another mortgage startup by the name of Eave also made money this way.
This meant you’d get more of a support-oriented experience instead of a salesy one, though I assume the staff was still motivated to close your mortgage somehow…
However, in light of market conditions, and perhaps because it wasn’t sustainable, they now charge a $995 loan origination fee and use commission-based loan officers.
So a bit of a 180 there, which I believe was driven by a rapidly changing housing market landscape.
However, I don’t believe they charge fees for the application, processing, or underwriting, which could be a plus.
But you’ll still be on the hook for third-party fees to cover the appraisal and title, and you’ll need to pay for homeowners insurance and property taxes.
Better Mortgage Rates
One thing I like about Better Mortgage is their transparency when it comes to mortgage rates.
Instead of telling you how great their rates are, but requiring you to call in for a rate because they fluctuate or some other excuse, they post them right online for anyone to see.
You can see rates for all the loan products they offer in one convenient place, and they give you a variety of different rates at various costs (with or without points).
Their rates seemed to be on par with what many other online lenders are offering, which is a good thing, especially once you factor in the limited lender fees.
As noted, they don’t charge any application, processing, or underwriting fees, and only a $995 origination fee.
Each mortgage rate listed also displays the points it will cost for the given rate, so you get the complete picture when shopping rates with other lenders.
To sweeten the deal even more, Better is currently offering a $6,000 statement credit for American Express cardholders (see terms).
The combination of potentially low rates, limited fees, and that big credit could make them really competitive and hard to beat.
Better Price Guarantee
In the past, the NYC-based fintech mortgage lender offered what it called the “Better Price Guarantee.”
The way it worked was pretty simple. In a nutshell, they’d give you $100 if they couldn’t beat another competitor’s price.
By price, they meant the interest rate offered plus the closing costs. Of course, switching lenders for $100 isn’t very worthwhile. And it appears they no longer have this guarantee in place.
However, when browsing their mortgage rates page, below the rates it says, “Have another rate? Let us match it.” So maybe they still do on a case-by-case basis.
Along the same lines, they also used to offer their “Better Buying Guarantee,” which offered up to $3,500 in lender credits if you use them a second time within three years of closing.
So if you took out a purchase loan or refinance loan with them, then interest rates dropped, you could apply with them again and avoid the typical fees associated.
That too appears to be gone as it’s no longer on their website. My guess is it was a feature during the low-rate refinance craze in 2020-2022, but now that rates are much higher, it’s gone.
However, in its place is a new Better Forever Program, which waives the loan origination fee if you use them a second time for a purchase or a refi.
Note that the refinance must take place at least six months after you close the original loan. This is typical as mortgage lenders will be subject to commission recapture if a loan is refinanced too quickly.
Where Better Mortgage Operates
They currently lend in all 50 states and the District of Columbia.
As it stands now, Better’s coverage represents more than 90% of mortgage volume in the United States.
At the moment, you cannot use Better Mortgage to get a loan in Puerto Rico. Or anywhere outside the United States for that matter.
It’s unclear if they’ll expand to U.S. territories in the future such as Guam, Puerto Rico, and the U.S. Virgin Islands.
Despite being founded in 2014, they quickly reached their goal to be fully-licensed nationwide lender.
Better Mortgage Reviews
On Google, the lender has a solid 4.6-star rating from about 2,600 customer reviews, which tells me they’re pretty well-liked.
On Zillow, Better Mortgage currently has a 4.4-star rating out of 5 from over 700 customer reviews. I’d refer to that as good, but not quite excellent.
Over at Bankrate they’ve got a less favorable 4.1-star rating from about 650 reviews, with 77% of reviews saying they recommend using Better.
Lastly, they have a 4.5-star rating on Trustpilot from about 600 reviews, which is deemed excellent on that site.
The company is an accredited business with the Better Business Bureau and currently holds a ‘B’ rating based on complaint history. Their BBB customer rating is 3.92/5 from about 700 reviews.
In summary, Better Mortgage appears to be generating a lot of positive buzz from its customers, though they aren’t quite perfect.
They might be a good choice if you’re refinancing an existing mortgage and it’s fairly straightforward.
For example, a conventional, conforming loan for a W-2 borrower with a good credit score.
The main cons are the lack of a full product menu, and the absence of physical locations.
Investment from American Express and Citi
In early 2019, Better received Series C funding from a number of high profile investors, including American Express.
So in a sense, the credit card issuer is now in the mortgage game, albeit indirectly.
A month later, they received similar financing from Citi, which incidentally has its own mortgage division.
But it seems instead of focusing solely on a revamp of their own offerings, they’re going the investment route as well.
My assumption is these capital injections will make Better a household name in the mortgage space before long.
Better funded $19.7 billion in mortgages during 2020, a 14X increase from the $1.3 billion funded back in 2018. And more than $47 billion in 2021. That’s impressive growth.
Still, they’ve got a long way to go to catch Rocket Mortgage and its $343 billion in loan origination volume.
Their latest innovation is known as Equity Unlocker, a program that lets Amazon employees pledge company stock in lieu of a down payment.
Better Also Operates Beyond Home Loans
Better Mortgage has an arrangement with Overstock (now the owner of the Bed Bath & Beyond brand) to offer home loans to its customers through a company called “Beyond Home Loans.”
The arrangement makes sense given the brand’s focus on home furnishings, which goes hand-in-hand with homeownership.
And they have special deals for qualifying customers who get a loan from Better Mortgage.
You can earn a free year of Welcome Rewards membership and up to $500 in Welcome Rewards points to spend at Bed Bath & Beyond.
Customers will receive $500 if taking out a first mortgage and $250 if taking out a second mortgage, such as a HELOC.
Better Mortgage Pros and Cons
The Pros
- Offer a fully-digital, online home loan application process
- Can get pre-approved for a mortgage in under 3 minutes
- Now offers 1-day commitment letters (conditional underwriting approval)
- Appear to only charge a $995 lender fee (could be less than competitors)
- View mortgage rates without providing personal information
- Up to $6,000 statement credit if you’re an Amex cardholder
- Better Forever Program (fee waiver when you use them again)
- Better Closing Guarantee
- Better Cash Offer (helpful for bidding war)
- Better Real Estate discount ($2k in closing costs for using a Better-referred agent)
- Lots of excellent reviews from past customers across all ratings websites
- An accredited business with the BBB
The Cons
- No physical locations (you work with them remotely online)
- Do not offer USDA or construction loans
- May transfer your loan for servicing after origination
Better Mortgage vs. Rocket Mortgage
| Better Mortgage | Rocket Mortgage | |
| Digital application process | Yes | Yes |
| Lender fees | $995 | Maybe |
| Where are they available? | 50 states and D.C. | 50 states and D.C. |
| Type of lender | Direct lender | Direct lender |
| Are there physical branches? | No | No |
| Do they offer FHA loans? | Yes | Yes |
| Do they offer VA loans? | Yes | Yes |
| Do they offer USDA loans? | No | No |
| Minimum credit score | 580 | 580 |
| Will they service my loan? | No | Yes |
| Low price guarantee? | Maybe | No |
Perhaps two of the biggest names in the home loan business are Better and Rocket, which dominate the online mortgage lender landscape.
They both seem to advertise just about everywhere, and also operate similarly without brick-and-mortar branches.
Each company leans heavily on tech, allowing customers to apply for a mortgage from a smartphone or any other device in a matter of minutes.
And the pair are also working to make more of the home loan application process paperless by adopting things like single source validation, which allows you to link your bank accounts and other financials.
The main difference is Better charges a flat $995 lender fee, while Rocket might charge more in lender fees, depending on your loan scenario.
In terms of mortgage rates, they appear to be priced relatively close to one another, though Better might win out due to lower fees.
Of course, every loan will vary so be sure to get quotes from both if you’re interested in working with either.
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I’d rather pay a premium than support vishal garg’s toxicity.