$0 Lender Fees, No Commissions, Guarantees Galore, and They’re Fast

$0 Lender Fees, No Commissions, Guarantees Galore, and They’re Fast

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Worried about whether you’re getting the best deal on your mortgage?

You may want to take a look at Better Mortgage Corp., now known simply as “Better,” a mortgage company that actually encourages borrowers to shop around.

They’re so confident they’ve got some of the best interest rates with the lowest fees that they’re willing to guarantee it.

What allows them to be so competitive is the fact that they don’t charge any lender fees, meaning they already have a huge leg up on other mortgage lenders. Let’s learn more.

Jump to Better Mortgage Review topics:

– Better Mortgage Fast Facts
– How to Apply with Better Mortgage
– Loan Programs Offered by Better Mortgage
– Better Mortgage Lender Fees
– Better Mortgage Rates
– Better Price Guarantee
– Better Buying Guarantee
– Where Better Mortgage Is Licensed
– Better Mortgage Reviews
– Better Mortgage Pros and Cons
– Better Mortgage vs. Rocket Mortgage

Better Mortgage Fast Facts

  • Direct-to-consumer mortgage lender
  • Founded in 2014, headquartered in New York City
  • Offers home purchase loans, mortgage refinances, and HELOCs
  • Does not charge lender fees and uses non-commissioned loan officers
  • Claims to offer a 100% online loan process that is mostly paperless
  • Currently licensed in 50 states and the District of Columbia
  • Funded $47.2 billion in home loans in 2021 (top-25 nationally)

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.

Roughly 80% of total volume was made up refinances and roughly 20% of loan volume came from the state of California, per HMDA data.

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 “Get Started.” 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 “View 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 non-commissioned 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. 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.

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, 10/6 ARM, 7/6 ARM, and 5/6 ARM.

They also offer a so-called digital HELOC with loans amounts up to $500,000, and CLTVs to 90%.

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 Doesn’t Charge Lender Fees

  • Better has a huge leg up on the competition due to their lack of lender fees
  • They don’t charge an origination fee or fees for underwriting or processing
  • Their loan officers are also non-commissioned and instead of a sales role take a support role
  • This makes it harder for other lenders to compete with them, especially since they rely on technology to close home loans faster

While Better offers the latest technology to help speed you through the loan process, they separate themselves from the crowd by eliminating lender fees.

Instead, Better relies upon the fee their investors pay them when they sell off the loan on the secondary market. Another mortgage startup by the name of Eave also makes money this way.

To that end, they also don’t charge fees for the application, processing, or underwriting, nor do they charge a loan origination fee.

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.

This means you should get more of a support-oriented experience instead of a salesy one. I’m assuming the staff is still motivated to close your mortgage somehow…

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 asking 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 lack of lender fees.

As noted, they don’t charge any application, origination, or underwriting fees.

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 low rates, no fees, and that big credit could make them really competitive and hard to beat.

Better Mortgage Price Guarantee

  • Better offers a price guarantee to ensure you land the lowest rate possible
  • They’ll match any valid competitor’s offer and give you an extra $100
  • But if they can’t beat a competitor’s rate and fees (collectively known as price)
  • They’ll give you $100 to close with that lender instead

If you’re still concerned about pricing, the NYC-based fintech mortgage lender has what’s called the “Better Price Guarantee.”

The way it works is simple. In a nutshell, they’ll give you $100 if they can’t beat another competitor’s price.

By price, they mean the interest rate you’re offered plus the closing costs.

Specifically, if Better’s Loan Estimate (LE) isn’t at least $100 less in closing costs at the same interest rate and for the same loan terms (excluding property taxes and insurance) as the LE from another lender, they’ll give you $100 if/when you close with that other lender.

There are some strings. First, the Loan Estimate must be dated within 1 business day from its date of submission to Better. So you’ve got to act quickly.

Well, you can basically just take any LE that you have that’s brand new and send it over to Better just to check.

However, if you’re already relatively far along in the process with another lender, it’s not going to work.

Secondly, it’s only available to customers who don’t (or didn’t) have a rate lock with Better in the 60 days prior to the date of the loan estimate from the other lender.

If you can pass those two tests, you might be able to get $100 on top of the good deal you’re getting on your mortgage. Or instead, switch to Better and get an even better rate and/or lower closing costs.

Assuming you stick with your original lender, you’ll have to present the Closing Disclosure (CD) and final note within 30 days of closing to get the $100, and the approval has to be based on the LE you submitted to Better.

Of course, they’re bound to try to make a deal somewhere in between to avoid all that.

Better Buying Guarantee

At last glance, the company has four guarantees, including one for appraisals, one for pricing, and one for on-time closings.

The latest is the “Better Buying Guarantee,” which offers up to $3,500 in lender credits if you use them a second time within three years of closing.

So if you take out a purchase loan or refinance loan with them, then interest rates drop, you can apply with them again and avoid the typical fees associated.

Because they don’t charge lender fees, that $3,500 can be used toward things like title insurance, appraisal, credit report, flood cert, and other settlement fees.

It cannot be used toward discount points, sadly.

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.

This means you get a 2.5-year window to refinance your original Better mortgage with them again and snag the $3,500.

Obviously, you should still shop around to ensure other lenders can’t do, ahem, better, even with the $3,500 factored in.

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.

And their bevy of guarantees might give you peace of mind to use them for a home purchase as well.

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 in funded back in 2018. That’s impressive growth.

Still, they’ve got a long way to go to catch Rocket Mortgage and its $313 billion in loan origination volume.

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)
  • Do not use commissioned loan officers
  • Do not charge any lender fees
  • View mortgage rates without providing personal information
  • Up to $6,000 statement credit if you’re an Amex cardholder
  • Better Price Guarantee (price match guarantee)
  • Better Closing Guarantee
  • Better Appraisal Guarantee
  • Better Buying 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 Nope 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? Yes 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 might be that Better doesn’t employ loan officers or charge lender fees, while Rocket does use loan officers and might charge commissions, 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 a lack of 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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