Better is a direct, online mortgage lender committed to making the process of applying and obtaining a mortgage loan simpler, quicker, and fully digital.

They do not charge any origination or commission fees.

The company’s sophisticated algorithm not only processes a borrower’s mortgage needs faster than traditional big banks but can lead to better savings.

Rate locks are set according to the customer’s needs, rather than the bank’s timeline, and verified pre-approval may be obtained in as little as 24 hours.

The company also enjoys an exceptional reputation, holding an A+ rating with the Better Business Bureau (BBB).

HOME TYPES

Better offers both fixed and adjustable rates for conventional and jumbo loans.

Currently, they do not offer mortgages for manufactured/modular homes, multi-family homes of five or more units, co-ops, or mixed-use properties.

They do offer financing for the following properties:

• Single-family homes
• Multi-family homes (up to four units)
• Townhouses
• Condominiums
• Planned Unit Development (PUD)
• Investment properties

WHAT STATES DOES BETTER SERVE?

Better does not serve every state, but the company announced its plan to add more in the future.

Currently, the company originates loans in the following states: Alaska, Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Mississippi, North Carolina, North Dakota, New Jersey, Oklahoma, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Washington, West Virginia, and Wisconsin.

TYPES OF MORTGAGES

Better offers the following options for both conventional and jumbo loans:

• Fixed Rate Mortgage – This type of mortgage has a set interest rate for the life of the loan, which can be for a 10-, 20- or 30-year period. This means the home owner’s monthly mortgage payment will not change.
• Adjustable Rate Mortgage – These loans have a fixed interest rate for a certain period of time. Typically, this is 5, 7 or 10 years. After that, the interest rate is determined by the market. This means that the owner could take advantage of interest rates that are lower when they purchased. On the other hand, their mortgage payment could increase if rates go up.

Most borrowers tend to opt for fixed-rate mortgages, but ARMs can be helpful to those who are purchasing a starter home and plan to sell in a few years as the fixed interest rates for that period tend to be lower.

• Jumbo Loans – This type of loan exceeds the mortgage limits set by Fannie Mae and Freddie Mac. Those looking to finance a more expensive home, or in a more expensive area, may have to consider a fixed or adjustable rate jumbo mortgage. In 2019, the maximum loan limit was $484,350.

Better does not offer government-backed loans, such as Federal Housing Administration (FHA) loans or Veterans Affairs (VA) loans.

Similarly, they do not offer construction or commercial loans, loans for properties that are owned by the bank or in the process of short sale or foreclosure, home equity lines of credit (HELOCs), second mortgages, Texas Cash-Out Home Equity Loans, or the refinancing of a home currently held in an LLC.

MORTGAGE RATES

By considering a variety of factors, Better is able to provide some of the most competitive rates in the business.

Better’s products all feature their Better Price Guarantee, in which they commit to beating any competitor’s price by at least $1,000 (within three business day of their loan estimate, if you haven’t yet locked in your rate), or they’ll pay you $100.

Since there are many elements involved in deciding the type of mortgage and deal that’s best for you, Better provides a wide range of educational resources and tools, such as calculators for mortgage refinance, mortgage payoff, and home affordability.

Another benefit of applying for a loan with Better is the speed with which they can obtain a pre-approval letter for you, thereby arming you with a tool to prove the seriousness of your intentions (to your agent and potential sellers).

ONLINE PROCESS

Better’s seamless online application process can be a major perk.

The company touts its ability to provide quotes in as little as three seconds, with initial approval in three minutes.

Quotes can be particularly helpful when trying to determine how much a borrower can afford.

The company also notes that the rate quotes a would-be borrower receives will stay the same in nearly all cases if the right information is provided.

Additionally, getting the quote won’t impact a user’s credit score.

However, it’s important to check the rates as they can change on a day-by-day basis.

Aside from current market conditions, rates are also determined by credit history and property characteristics.

It can also provide a letter of pre-approval.

While pre-approval can be essential in determining how much the lender is willing to finance the borrower, it’s also beneficial to have a letter when bidding on a home.

This shows the seller that the borrower is serious about buying the home.

Better offers two types of pre-approval letters: the basic pre-approval letter and the verified pre-approval letter.

The former is based on the borrower’s stated income and a soft credit pull.

A verified pre-approval is a bit more in-depth, as the borrower needs to upload financial documents such as paystubs, tax returns, and bank statements for the company to review.

The kind of documents required to buy a home will depend on the agent and seller, as some want pre-approvals that are more deeply vetted than others.

It only takes three minutes for the company to compile a basic pre-approval letter, but a verified letter takes slightly longer, at 20 minutes.

There may be additional processing time if the potential borrower submitted incomplete documents or the company needs to verify additional information, like overtime or commission earnings.

Borrowers also have the option to lock into a rate that they’re happy with while they go through the application, ensuring the interest rate or monthly payment won’t go up by the time they’ve completed the process.

QUALIFYING

Currently, Better only provides loans to customers with credit scores of 620 and above, which they determine by calculating the median score from all three bureaus (Transunion, Experian, and Equifax).

While every loan requires slightly different documentation depending on the borrower’s financial details, apart from credit score, Better also asks for:

• Two years of W2 forms and personal tax returns
• The most recent two months of pay stubs and bank statements (from all accounts)
• Updated insurance policies

MORTGAGE RATES AT BETTER

Better is committed to helping borrowers obtain mortgages for purchase quickly and efficiently, with verification in as little as 24 hours.

They provide some of the best pricing in the mortgage industry, coupled with a transparent and straightforward application and origination process.

Because the company does not offer government-backed loans or other complicated loans, this is the kind of lender that is best suited for a borrower that has the money and means to pursue a conventional loan.

Originally meant to be a fully DIY platform, it has also incorporated dedicated loan consultants, to help navigate the complexities of different loan pricings, adjustable fees, and discount points.

Better has outstanding ratings across multiple customer review websites, focusing particularly on the excellence and professionalism of their service.

All in all, the company is an excellent choice for customers with good to excellent credit.

If you want to know more about the best mortgage rate companies, read our review of the best ones of 2019.