Better Mortgage Review

New York City-based online mortgage lender Better.com may be a younger lender, having started in 2016, but it’s certainly not growing slowly. While other companies were laying off workers in droves because of the pandemic, Better.com hired some of those displaced employees, having brought on at least 1,000 workers in early spring.

The online-only mortgage lender was created to drastically shorten the loan process, and it has for many buyers. While Better Mortgage won’t be the perfect fit for all buyers, it is a great option for a lot of potential homeowners. Before you decide on a lender, though, you should make sure you know everything about what the lender offers, who it works best for and what it can offer you. Read our Better mortgage review below to find out what you need to know about Better.com mortgages.

Using our proprietary SimpleScore methodology, we compared all major lenders and included a Better.com mortgage review, to create a score based on customer satisfaction and support, fees, interest rates and loan terms, to help consumers make the best choice.

Best for Online-Only Mortgage Loans – Better Mortgage Company

One of the best online-only mortgage lenders in 2020. If you have the same lack of patience as Joffrey Baratheon in “Game of Thrones,” you’ll love Better’s instant loan estimate and quick closing process.

J.D. Power Rating
N/A
Min. Credit
620
Min. Down Payment
3%
SimpleScore
3.8 / 5.0
close
SimpleScore Better Mortgage Company 3.8
Perks 2
Credit Impact 5
Customer Satisfaction N/A
Product Variety 3
Fees 5
  • No lender or origination fees
  • Extremely competitive rates
  • Immediate loan estimate
  • Only offers conventional and jumbo loans
  • Not available in all states

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In this article

    Better.com mortgage loans at a glance

    Better Price GuaranteeBetter Mortgage offers a Better Price Guarantee. You’ll get $100 if Better can’t match or beat a competitor’s loan estimate
    Better Real Estate discountUse a Better Real Estate agent and mortgage lender and you’ll be eligible for up to $2,000 in lender credits
    Multiple opportunities to lock in ratesBetter allows you to lock in today’s rate at any point up until closing, so you never have to worry about FOMO.

    What we like about Better.com mortgage loans

    No lender or origination fees

    One of the best things about getting a mortgage with Better.com is full transparency about the process and the costs. Better doesn’t charge lender fees, including origination, application, processing and underwriting fees. That means you’ll know that the “loan costs” section will be zero before you even request a loan estimate.

    [ Read: What Are Closing Costs and How Much You’ll Pay? ]

    Extremely competitive rates

    One of the biggest perks for using Better is that it offers really stellar mortgage rates. One way Better is able to offer such great mortgage rates is the loan funding process. It works with 25 of the world’s largest mortgage investors to keep costs and rates as low as possible for the borrower.

    According to Better.com, the average “new homebuyers save $19,600 and clients who refinance save $7,300 over the life of their loans.”

    [ See: Compare the Best Mortgage Rates ]

    Immediate loan estimate

    Traditional mortgage lenders can take up to three days to provide a loan estimate to potential borrowers. With Better.com, you’ll complete the online application (which takes about three minutes) and then get a preapproval letter and loan estimate instantly.

    There’s no need to wait for a full financial review for preapproval, and there’s only a soft credit pull at this point, so your credit score won’t be affected by doing this. Getting the loan estimate up front will give you a clear idea of what your loan would cost with this lender.

    Things to consider 

    Only offers conventional and jumbo loans

    If you’re looking for a USDA or VA loan, Better doesn’t offer them. It also doesn’t offer home equity loans, lines of credit (HELOC) or second mortgage loans. You’ll have to choose from a 15-, 20- or 30-year fixed-rate conventional or jumbo loan for your next home purchase or refinance of your existing home. This lender also offers adjustable-rate mortgage loans.

    [ Next: What is a Conventional Loan? ]

    Not available in all states

    Better.com mortgage is available in 43 states and the District of Columbia. If you live in the following states, you won’t be eligible to apply for a mortgage loan with Better:

    • Hawaii
    • Massachusetts
    • Minnesota
    • Nevada
    • New Hampshire
    • Vermont
    • Virginia

    The company is working to expand to all 50 states in the future, but for now, the options are limited to the areas it currently serves.

    [ More: How to Get the Best Mortgage Rates ]

    Better.com mortgage loans vs. the competition

    SoFi’s success in personal and student loan offerings has now expanded into mortgage loans. Like Better mortgage, this lender doesn’t charge an origination fee, and it offers a $500 discount to existing SoFi members.

    J.D. Power Rating
    N/A
    Min. Credit
    660
    Min. Down Payment
    10%
    SimpleScore
    3.5 / 5.0
    close
    SimpleScore SoFi 3.5
    Perks 2
    Credit Impact 5
    Customer Satisfaction N/A
    Product Variety 3
    Fees 4

    With just a few clicks, you can get an idea of a mortgage rate with Better, but you have to fill out the application to get the same from SoFi. That could be a downside to using this lender. But if you’re looking for a home equity loan, SoFi would be the choice between the two since Better doesn’t offer them. Read our full SoFi review here.

    Guild Mortgage offers a completely online experience, but also has branches if you’d prefer to work on your loan in person.

    J.D. Power Rating
    4/5
    Min. Credit
    620
    Min. Down Payment
    3%
    SimpleScore
    3.8 / 5.0
    close
    SimpleScore Guild Mortgage 3.8
    Perks 4
    Credit Impact 4
    Customer Satisfaction 4
    Product Variety 5
    Fees 2

    Unlike Better, Guild has VA loan options for those who qualify, though rates aren’t attainable without a full application and hard credit pull for any of its mortgage loans.

    First-time homebuyers may be interested in this lender’s 3-2-1 home program. As a partner with Home Depot, those buyers who qualify and get a mortgage through Guild are eligible to receive up to $2,000 in gift cards to help offset the cost of new homeownership. Read our full Guild Mortgage review here.

    Non-traditional income sources are becoming more common, and New American Funding works closely with these types of borrowers to help them qualify for a mortgage.

    J.D. Power Rating
    N/A
    Min. Credit
    500
    Min. Down Payment
    3%
    SimpleScore
    4 / 5.0
    close
    SimpleScore New American Funding 4
    Perks 4
    Credit Impact 4
    Customer Satisfaction N/A
    Product Variety 5
    Fees 3

    You can complete the process online like you can with Better mortgage, but each application requires review by a loan officer before you will get an offer. Another downside is that New American charges origination fees, but it doesn’t disclose what exactly they are without a completed application.

    This lender also offers more mortgage loan options than Better, including FHA, VA, reverse mortgage, buydown loans and I CAN loans, which allows you to customize your loan terms. Read our full New American Funding review.

    How much will a Better mortgage loan cost?

    The cost of a Better mortgage loan varies based on several factors, including where you’re purchasing, the cost of the home and your credit history. With Better.com, you won’t pay lenders fees, but you will have some out-of-pocket costs, including:

    • Down payment
    • Third-party fees (may be partially paid by seller)
      • Title insurance
      • Appraisal fee
      • Transfer taxes
    • Escrow deposit
    • Prepaid interest
    • Loan points (only if you choose to pay points to lower the interest rate)

    These are just a few of the figures included in your closing costs. On average, you should expect to pay between 2% to 5% of the home purchase price in closing costs.

    Cheaper alternatives to Better mortgage loans

    Guaranteed Rate is available in all 50 states and Washington, D.C. Like Better, this lender also offers an online mortgage application process. It gives buyers the same loan options as Better, with additional options for FHA and VA loans. For those who are financially savvy, it also has an interest-only mortgage, which, with discipline, could save you thousands over the life of the loan compared to Better’s fixed loan options.

    Reali is another option. This lender considers itself a one-stop-shop for buying or selling a home, allowing the user to search for purchases or list their home for sale. It also offers mortgage services with a unique twist. Like Better, the agents don’t take a commission, but the lender takes it a step further by offering part of the seller’s commission as a rebate post-purchase to the buyer. The website states it saves borrowers $20,000 on average, a few hundred dollars more than Better’s savings of $19,600, noted above.

    Better mortgage loans in the news 

    • For the first time in June 2016, Better.com landed itself on CNBC’s Disruptor 50 list, coming in at No. 15. At the time, Better had seen an explosive 200% increase since the beginning of the COVID-19 pandemic, which has continued through the year. Better has used that growth to broaden their workforce when other companies are laying off workers.
    • A November 2020 Housingwire article noted that Better is planning to make a public stock offering and gain IPO status as early as 2021. The Better mortgage company is now valued at over $4 billion, having raised hundreds of millions of dollars each year leading up to 2020 to reach their goal.
    • Companies with explosive growth are not immune to lawsuits, and CEO Vishal Garb is no exception. A November 2020 Forbes article details multiple lawsuits the entrepreneur is currently involved with, including one filed by his former business partner alleging the CEO used stolen intellectual property to build Better.com and misappropriated $3 million from that company. “We can’t comment on ongoing litigation, but we are confident that these accusations are baseless,” advised Better.com spokesperson Patrick Lenihan.

    Compare top mortgage lenders

    We welcome your feedback on this article and would love to hear about your experience with the mortgage lenders we recommend. Contact us at inquiries@thesimpledollar.com with comments or questions.

    Mandy Sleight

    Contributing Finance Writer

    Mandy Sleight is a freelance writer and has been an insurance agent since 2005. She creates informative, engaging, and easy-to-understand content on the topics of insurance, personal finance, sustainability, and health and wellness. Her work has been featured in Kiplinger, MoneyGeek and other major publications. Learn more about Mandy and her writing on her website or by connecting on LinkedIn.

    Reviewed by

    • Angelica Leicht
      Angelica Leicht
      Mortgage Editor

      Angelica Leicht is an editor at The Simple Dollar who specializes in mortgages, mortgage refinancing, home equity loans, and HELOCs. She is a former contributing editor to Interest.com and PersonalLoans.org.