About Better Mortgage

If you’re looking for a mortgage, you’ve entered the arena at a pretty good time in history.

Instead of doing hours of research online before making your first phone call to a lender, you can use a service like Better Mortgage and get pre-approved for a loan in a matter of minutes.

Not only that, but if you’re on the hook for an existing mortgage, you can use Better.com to find a refinance offer.

That’s a pretty big sigh of relief, especially considering the stress that comes with the money, responsibility and information of buying a home or refinancing.

Thankfully, Better.com and similar sites say, they’ve come up with a better way of finding a lender who can get you a loan based on your credit score, income, down payment and price of the home you want. But this nearly automated world of lending isn’t always what it seems.

For instance, a site like LendingTree.com provides you (literally!) dozens of mortgage quotes in less than 15 minutes. But customers have complained that they have no control over who calls them, or, in some cases, who taints their credit score by running hard checks.

Does Better.com offer a “better” solution? How exactly does it work? Are there drawbacks?

We’re going to answer these questions in one way or another over the next few minutes.

Note: Better.com’s real name is Better Mortgage, so we’ll use those names interchangeably throughout this article.

How Does Better.com Work?

We did a test run on Better Mortgage’s site to get a feel for what the average consumer can expect. Right off the bat, Better Mortgage’s home page says they can quote you competitive mortgage rates in 3 seconds.

So, we put that claim to the test with a dummy quote for a home in Florida. It didn’t work. Why? Because Better Mortgage only provides financing for homes in California, Oregon and Washington.

So, we redid the quote by entering a California zip code (92115), along with our credit score (740-759) and our down payment amount ($100,000 on a $500,000 house).

The results came in less than five seconds. We had 18 different options across six types of loans: 30-, 20-, and 15-year fixed rates and 10/1, 7/1 and 5/1 adjustable-rate mortgages. We found this refreshing, as most lending sites lure you in with low percentages for adjustable rate mortgages (ARM). ARM’s are usually a bad idea because you pay lower rates for a period of five, seven or 10 years, but after the higher rates kick in many homeowners have a hard time making their payments.

Let’s get back to the quotes: two of the three included points payments. What that means is that they calculated our monthly payment based on us paying a percentage point of our APR up front, rather than spreading it out over the life of the loan.

The reason that’s interesting to us is that buying points is a hotly debated topic and there’s no one answer as to whether or not it’s the right thing to do.

Now, points aside, we appreciated how simple Better Mortgage makes the rates page.

Better.com rates pageBetter.com’s rates page is simple and easy to understand.

The refinance option worked exactly the same way.

To get a pre-approval for a mortgage or refinance, you choose which offer you like the best and fill out additional information, including the address of the home you want to buy/refi.

Quick note: It’s common to confuse Better Mortgage with a site like LendingTree.com who connects you to “direct lenders”. However, the two aren’t the same. Lending Tree connects you with direct lenders. Better Morgtage is a direct lender. You’re basically cutting out the middleman (and a lot of annoying emails and phone calls…check our Lending Tree review for the details) by skipping Lending Tree-style sites and going directly to Better Mortgage

Where Do the Loans Come From?

As a direct lender, Better Mortgage provides your loan via an investor. Once your loan is finalized, you’ll be making payments to the investor who services the loan until it’s paid off.

I asked Mike Pepin, a marketing analyst at Better.com, about this process. Here’s what he said:

  • Better Mortgage analyzes your income, debt, credit history and the value of your home as compared to its price tag.
  • They come up with a loan amount and interest rate you get to see.
  • Meanwhile, Better.com finds investors who are willing to buy the loan and service it.

In other words, Better.com is like a guy who has a lot of friends who like to lend. You ask the guy to borrow some cash. He says yes, based on how much you’re asking for and how able you are to pay it back. Since he’s done the research and knows you are reliable, he can go back to his lend-happy friends and say, “This borrower checks out. Who wants to lend to him?”

Once they find an investor (lender), Better.com works out the details and, eventually, you start making payments to the investor. According to Mike and Chief Marketing Officer Peter Scherr, those investors include reputable big banks.

What Kind of Fees Can I Expect?

When you secure a mortgage, you end up paying what’s known as “closing costs.” That’s cash out of your pocket, so to speak, that you need to pay up front. You can’t roll it into your mortgage.

According to Better.com’s FAQ page, closing costs for 2015 typically ranged from $1,500 to $3,500. We double checked these closing costs with Bankrate.com’s figures for California. They calculated the average closing costs on a $200,000 home to be about $900, which falls into the $1,500-$3,000 range for a $400,000 mortgage.

Even though you’re buying your home with money you secured through Better.com, you still have to pay third-party costs like appraisals, title changes and other fees common to the homebuying experience.

You won’t have to pay an origination fee, though, which is basically a charge for processing your application. In most cases, that fee is 0.5 or 1% off your loan amount. In the example we used ($400K), that would total out to between $2,000 and $4,000.

How Sure Are the Rates I’m Quoted?

Rates are a way for lending companies to lure you in. In many cases, they’ll plaster a landing page or home page with a low interest rate. Come to find out, that rate is actually for a 5/1 adjustable rate mortgage and not the traditional 30-year fixed rate mortgage (which typically has a higher percentage rate than ARMs).

Better Mortgage, as we pointed out, doesn’t do that. They give you the 30-year fixed rate as the first result when you ask for a quote. And, according to their FAQs, that rate will remain the same if your answers are consistent.

Once that rate is locked in, Better Mortgage claims you’ll have your funding in an average of 26 days. Normally, they say, it takes about 47 days.

Word to the wise: Be very straightforward about your credit score, income and other related numbers. The more truthful you are, the better the chance that your final rate will be the same as, or close to, what you were first quoted. Better.com will check do a basic credit check and income verification, so fudging the numbers won’t help you.

What Are Other People Saying About Better Mortgage

Because Better.com is a relatively new company (registered in New York in 2014), there aren’t many reviews of the company. We did find five reviews of the company on LendingTree.com.

All five reviews were 5-star, with customers saying “love the online process from start to finish and everything was so open and clear” and “I felt like I was dealing with true professionals.”

The Final Word: Is Better Mortgage a Good Choice?

Based on the research we’ve done on Better.com, we think the site offers some advantages you won’t find on a bigger site like LendingTree.com.

For example, LendingTree connects you with a bunch of companies who lend. Better.com is actually one of those lenders, so you don’t have to go through the hassle of picking one lender out of many.

Another factor which works to the consumer’s advantage, in our opinion, is that Better Mortgage does research to understand exactly what kind of borrower you are. So, when they give you a rate quote, you most likely won’t see a big rate jump, according to Mike and Peter.

It’s kind of like how car companies say they’re selling cars with 0% APR, but when you read the fine print there are certain requirements you must meet to get that amazing interest rate.

From what we’ve seen in our research, Better.com doesn’t do that. In fact, when you go to their site, you aren’t hit with ARM rates that try to lure you in.

Though what we’ve read and heard says that Better.com is a reliable site, we can’t say with certainty that consumers are happy with the service. That’s not because there are bad reviews; there just aren’t that many out there.

Also, Better Mortgage only offers loans and refi’s in California, Oregon and Washington.

If Better.com’s lack of reviews, reach and history give you pause, there are many other online lending options you can check out.

Want to Learn How to Get and Keep a Good Credit Score?

Our FREE eBook will teach you how to get a good credit score that will help you save thousands by scoring the best deals on loans, insurance, and credit cards. Enter your email below to get a free copy of the eBook and to receive our weekly newsletter!

8 Customer Reviews for Better Mortgage

Average Customer Rating: 2.8
Rating Snapshot:
5 star: 3 4 star: 0 3 star: 1 2 star: 0 1 star:  4
Bottom Line: 50% would recommend it to a friend
Showing 1-8 of 8
Sort reviews by:

  • 1 out 1 people found this review helpful

    Low rate, easy website.

    • Chicago, IL,
    • Jun 29, 2017
    • Verified Reviewer

    I am a first-time homebuyer. I closed on a condo in 35 days (today is June 28th) with a 4% fixed 30-year rate with 5% down and no points. I worked primarily with Sathi and Amy, who were both attentive and easy to work with. I will refi with them if Trump turns the economy into a dumpster fire and rates plummet again. Thanks to the Better team!

    Bottom Line: Yes, I would recommend this to a friend

    Help others find the most helpful reviews

    Was this review helpful?

    yes no
    Comments (1)
    View all 1 commentsHide comments
    • Jul 3, 2017

      Kristen Connor, Chief Experience Officer

      Hi Jared,

      Congrats on becoming a homeowner! I’m so glad to hear that you enjoyed your purchase experience with us, and I hope you'll stay in touch with any mortgage needs you may have in the future.

      Sincerely,

      Kristen Connor

    Do you have an account? Log In before commenting.

    (If you don’t have an account – don’t worry, you can create it after)


  • 1 out 1 people found this review helpful

    Better Mortgage is trying to cheat customers out of their $500 deposit

    • Los Angeles, CA,
    • Jun 15, 2017
    • Verified Reviewer

    Better.com and Alex are cheats. They consistently reassured me throughout the initial refinancing process that I would receive the full $500 appraisal deposit refund if the appraisal did not take place and I decided to go with another lender.

    Well, I never met with their appraiser, nor did their appraiser ever come to my residence or enter my home to perform the appraisal. When I contacted Better.com to notify them that I was going with another lender, I was told that I would only receive a $300 refund, and that I would be charged $200 for a "Desktop Review Property Inspection Report," which is essentially a Google search of property facts easily found on Zillow, etc. I never requested to have this "report" performed, nor was I ever asked about it. In fact, this "Desktop Review Property Inspection Report" was never once mentioned on the loan estimate, nor was it ever mentioned the numerous times I had asked various Better.com representatives whether I needed to worry about not receiving my full $500 refund if I did not have an appraisal performed and did not follow through on the refinancing process through Better.com.

    It's obviously some imaginary, made-up report which the company uses as a vehicle by which to scam potential customers out of a portion of their appraisal deposit refunds and to make an extra profit. Clearly.

    Bottom Line: No, I would not recommend this to a friend

    Help others find the most helpful reviews

    Was this review helpful?

    yes no
    Comments (1)
    View all 1 commentsHide comments
    • Jun 15, 2017

      Kristen Connor, Chief Experience Officer

      Thanks for your candid feedback. I am very sorry for the difficulty you faced receiving the full refund of your $500 appraisal deposit. As I communicated to you via email, we refunded you the additional $200 on June 13, which is the same day this issue was brought to my attention.

      Our experience can only improve if we understand where we've failed. It's clear we should have informed you of the inspection fee prior to ordering the Desktop Underwriter® Property Inspection Report that was required to complete a refi given the location of your home. Even though we followed regulatory guidelines for a legitimate inspection, we could have avoided this confusion by speaking with you first.

      I am grateful that you raised the issue. It gave us visibility into a way we can improve our practices. Should you have any additional feedback, please feel free to email me directly at [email protected]

    Do you have an account? Log In before commenting.

    (If you don’t have an account – don’t worry, you can create it after)


  • 2 out 4 people found this review helpful

    Terrible

    With the help of my daughter, we applied online to refinance my investment property and my personal residence. Everything changed continually with them in one day. There were three changes in the amount of money that it was going to be for the mortgage and they needed documents constantly (the same documents many times). Every time my daughter dealt with them, it was insanely aggravating.

    I went to another mortgage company, and in less than two weeks I had refinanced both loans, signed on them and closed, and I gave them fewer documents than I gave Better Mortgage; it was half the hassle. The place they sent me for an appraisal (I had to get an appraisal at my new mortgage company) and one of my house is appraised $30,000 higher at the new place. I even got into an argument with them when they decided that the address of my house was not the address of my house, and they wanted to call it a different street name, even though I took pictures of the street sign. I showed them insurance papers and sent them mortgage documents, but it was constantly aggravating.

    I finally walked away from it. I'm so much happier with my rate (my rate is 4% on one loan and 4.75% on the other). For an investment that is great.

    This company gave me nothing but a headache and aggravation for over five weeks, and every time I dealt with them my blood pressure went through the roof. I would not recommend this place for anyone to do a mortgage with; they don't listen to what you have to say and they don't listen to the documents. Keep looking, you will find a better company to deal with. When we started with the loan, we gave them all the information they would need, all of the problems that we've had in the past, every piece of document they would need, and it still wasn't enough. With the new company, I gave them the same information and they were ready to go immediately. In fact, they told me I gave them too many documents.

    So please, go elsewhere, unless you want aggravation and a headache.

    Bottom Line: No, I would not recommend this to a friend

    Help others find the most helpful reviews

    Was this review helpful?

    yes no
    Comments (0)
    View all 0 commentsHide comments

    Do you have an account? Log In before commenting.

    (If you don’t have an account – don’t worry, you can create it after)


  • Some good, some bad

    Positives: At the top of the list for Better Mortgage is that, by a long way, they offer the best deal in terms of interest rate and lender fees of anyone we looked at online, and we looked at several, including Quicken, Amerisave, and Guaranteed Rate. And we ultimately got a deal that was pretty close to what was originally quoted in their “3-minute estimate."

    The folks at Better Mortgage are pleasurable to work with. They are accessible by phone or email and generally respond quickly to inquiries.

    Negatives: The process was slow. We applied for a refinance on May 31, 2016, and closed on October 17, 2016. I would classify the problems in two categories.

    The first is a general level of disorganization and lack of attention to detail. The slick website gives the impression that everything is automated and runs perfectly like a well-oiled machine. But there were often mistakes in the documents they provided to us, which would sometimes take two or three iterations to correct. They also asked for the same information from us multiple times, which was a headache to provide, because we had to download, print, fill-out-and-sign, scan, and upload each time.

    The second category is the fact that they are not local to your particular area (unless you live in Manhattan), so all of their third parties (appraiser, title company, etc.), who have to be local, are not in an ongoing business relationship with them. This got us into protracted delays, wherein a third party entity held up the loan for a few months based on stickler-type requirements. These almost certainly would have been ironed over immediately if the lender was an established local lender working with local third party entities who all know and trust each other, and all work together to get the deal done quickly.

    Having said all that, we did (after several months) finally get our refinance, close to the very good rate and fees that were originally quoted to us.

    Bottom Line: Yes, I would recommend this to a friend

    Help others find the most helpful reviews

    Was this review helpful?

    yes no
    Comments (0)
    View all 0 commentsHide comments

    Do you have an account? Log In before commenting.

    (If you don’t have an account – don’t worry, you can create it after)


  • 2 out 2 people found this review helpful

    Quick and Easy Refinancing

    • Los Angeles, CA,
    • Oct 18, 2016
    • Verified Reviewer

    It's a Quick and an Easy Rffi. I locked in at the end of Aug 2016, funded by end of September, and application and "paperwork" all online. Having a scanner really helps! I answered a few questions and loan approved.

    They did ask a couple of questions that I thought were kind of trivial, but, I did answer them and all went smoothly.

    I did choose to pay some points to lower my rate. I really liked that they displayed all the choices and I was able to choose the loan and rates that I wanted.

    Bottom Line: Yes, I would recommend this to a friend

    Help others find the most helpful reviews

    Was this review helpful?

    yes no
    Comments (0)
    View all 0 commentsHide comments

    Do you have an account? Log In before commenting.

    (If you don’t have an account – don’t worry, you can create it after)


  • 4 out 6 people found this review helpful

    Horrible Waste of Time

    • Los Angeles, CA,
    • Sep 26, 2016
    • Verified Reviewer

    Waste of time and money. Better Mortgage approved me right out of the gate and strung me along for a month making me jump all sorts of hoops and provide crazy documentation, which I supplied all of.

    I had to remove inaccuracies in my credit report also which was a huge pain. After a month of them saying “just do this one more thing and we will be good”, they denied my loan and set my project back at least 30-60 days.

    Better Mortgage is not better and I suggest you stay away.

    Bottom Line: No, I would not recommend this to a friend

    Help others find the most helpful reviews

    Was this review helpful?

    yes no
    Comments (1)
    View all 1 commentsHide comments
    • Nov 11, 2016

      Kristen Connor, Chief Experience Officer

      Hi Matt,

      I'm so sorry that you didn't have a good experience working with us. I completely understand how frustrating that experience must have been, and I do wish that we had been able to help you out. If you'd like to discuss your situation further, please reach out to our team at [email protected]

      Sincerely,

      The Better Team

    Do you have an account? Log In before commenting.

    (If you don’t have an account – don’t worry, you can create it after)


  • 3 out 3 people found this review helpful

    Great Experience

    I just closed the refinance loan today after a little over 3 weeks. Working with Sathi Roy and team was smooth and professional. Got a great rate and terms. Highly recommend!

    Bottom Line: Yes, I would recommend this to a friend

    Help others find the most helpful reviews

    Was this review helpful?

    yes no
    Comments (0)
    View all 0 commentsHide comments

    Do you have an account? Log In before commenting.

    (If you don’t have an account – don’t worry, you can create it after)


  • 6 out 14 people found this review helpful

    Don't waste your time

    • Van Nuys, CA,
    • Jul 13, 2016
    • Verified Reviewer

    Please don't jump through all the hoops as I did. This has been my worst refinancing experience. Even when all the documentation is provided, there is another form that must be filled out. I ended up pulling the plug on the loan even after I had paid for an appraisal.

    Bottom Line: No, I would not recommend this to a friend

    Help others find the most helpful reviews

    Was this review helpful?

    yes no
    Comments (1)
    View all 1 commentsHide comments
    • Sep 20, 2016

      Kristen Connor, Chief Experience Officer

      Hi Mary,

      I'm so sorry to hear that you had a frustrating experience working with us. We're working every day to make the mortgage process simpler for all Americans, so feedback like yours is very valuable as we constantly improve our process. We would love to hear more about your experience so that we can explore how we can improve in the future. Please reach out to [email protected] if you'd like to discuss your experience with a representative from our team.

      Sincerely,

      The Better Team

    Do you have an account? Log In before commenting.

    (If you don’t have an account – don’t worry, you can create it after)


Showing 1-8 of 8

Write a Review for Better Mortgage!

Share your experience to help others avoid scams & discover great products!

Write a Review