What Is Better Mortgage?

By J.R. Duren
HighYa Staff Updated on: Jun 5, 2018

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 Mortgage 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 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 Beter Mortgage 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.

How Does Better Mortgage 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, their home page says they can quote you competitive mortgage rates in 3 seconds.

Better is now available in 14 states: Arizona, California, Colorado, Connecticut, District Of Columbia, Florida, Georgia, Illinois, North Carolina, New Jersey, Oregon, Pennsylvania, Texas, 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 page Better.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 Mortgage, 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 Mortgage 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.

Better Mortgage Fees

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 home buying 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% of 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 You’re 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 do a basic credit check and income verification, so fudging the numbers won’t help you.

A Look at Better Mortgage Consumer Reviews

Better Mortgage receives good reviews from borrowers.

As of 6/5/18, the company had an average rating of 3.7 from HighYa reviewers. The best reviews noted how easy and fluid the process was, while negative reviews focused on the funding process taking too long.

From our perspective, the reviews are indicative of the type of reviews you get with mortgage lenders. The good reviews laud the process while the bad reviews lampoon it.

What’s most important for you to know is that Better Mortgage’s reviews on HighYa are pretty solid and indicate that there’s a good chance you’ll enjoy your experience.

Reviews of the company are great on other sites as well, with most consumers giving Better Mortgage high praise.

In terms of how often the initial quoted rate for your mortgage matches the rate you actually get, Bankrate says borrowers had a 95% success rate.

Is Better Mortgage a Good Choice?

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

For example, LendingTree connects you with a bunch of companies who lend. Better Mortgage 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 Mortgage 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.

What we’ve read and heard says that Better.com is a reliable site, and it appears that customers are overall happy with the company according to positive reviews on websites around the web.

Also, at this time, Better Mortgage only offers loans and refi’s in 14 states – we hope to see the state inventory list expand in the near future.

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61 Consumer Reviews for Better Mortgage

Average Consumer Rating: 3.9
Rating Snapshot:
5 star: 40 4 star: 4 3 star: 2 2 star: 1 1 star:  14
Bottom Line: 72% would recommend it to a friend
Showing 1-11 of 61
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  • Above and beyond

    • Pennsylvania,
    • Sep 13, 2018
    • Verified Reviewer

    We worked with an extremely dedicated loan ranger (Joana) who worked and reworked our application fighting to get us approved. My husband and I had a very unique application, and Joana guided us every step of the way. I highly recommend Better.com and Joana Marin.

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

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  • Better is better! They know how to treat their customers.

    • Beachwood, NJ,
    • Sep 12, 2018
    • Verified Reviewer

    Obtaining loan approval for a mortgage can be an overwhelming and daunting task. Additionally, some companies I have previously dealt with leave you feeling forgotten, causing a nail-biting lapse that leaves you so distressed. Not Better Mortgage! Their customer service is above reproach, making each customer feel as though they are the only ones. The caring and concern and even emotional support that exudes from the loan officers are outstanding. Not once did I have to feel inferior or forgotten.

    Don't get me wrong, it's a long process, but Better Mortgage stays on top of things and helps you every step of the way. I highly recommend this company to anyone seeking a mortgage loan.

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

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  • Great rates, easy to use!

    • Chicago, IL,
    • Sep 11, 2018
    • Verified Reviewer

    I happened to find Better online when I was comparison shopping for mortgage rates, and they had the best rate. Once I learned more about their process and goal of simplifying the mortgage lending process, I decided to move forward with them. The online portal was well-designed, easy to use, and they did a good job of keeping us up-to-date on where we were in the process and who we should contact if we had any questions or issues. The closing was scheduled at our convenience, and it went really smoothly! I'd highly recommend it!

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

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  • Great online app

    • Atlanta, GA,
    • Sep 11, 2018
    • Verified Reviewer

    Doing everything online allowed us to check daily to see what was happening. As we completed the task, the site was updated and we could see what other items needed to be done. Very easy to upload documents and watch the process proceed.

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

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  • Better Mortgage - completely satisfied

    • California,
    • Sep 10, 2018
    • Verified Reviewer

    The flow of the online application is simple and intuitive, Better Mortgage requires a minimal amount of work which is really required. Loan officers Kelly Lescano, David Hu, and Eric Wilson were very helpful and easy to work with. Highly appreciated.

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

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  • Wonderful!

    • Erie, PA,
    • Sep 4, 2018
    • Verified Reviewer

    Jennifer and Better Mortgage as a team were amazing to work with. They answered all the inquiries we had and guided us throughout the process. We were a little worried initially, as it was mostly online but that was the best part! It was easy, fast, and absolutely wonderful to work with Jennifer, our contact person, and the entire team. Thank you, and your turn around time was within the time frame they mentioned. I would definitely use them for all our future investments.

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

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  • Loan application for home mortgage

    • Aurora, IL,
    • Aug 24, 2018
    • Verified Reviewer

    It was a very convenient process. Better was very responsive and accessible throughout each stage. There were some very last minute scrambles that I did not think were necessary, but as a whole, it was a very pleasant experience and would certainly recommend to others.

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

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  • Started good, middle horrible, end good

    • California,
    • Aug 22, 2018
    • Verified Reviewer

    Better Mortgage breaks the process down into three phases (which equates to working with three different people (or their teams): pre-approval, locking in the rate, loan processing, and closing. For pre-approval and locking in the rate, Better Mortgages first agent was nice, polite, and responsive. It was very simple, I submitted all my information and was pre-approved. Next, we locked in the rate and Better Morgage has a nice tool to compare all the rates at once, and you'd see what your estimated payment would be. The middle phase of loan processing was horrible, my loan ranger, and her team did not keep me informed and told me that other loans had higher priority because they needed to be closed.

    As I said, I was not kept informed (maybe I am a little needy and want to be more informed), but my emails to my loan ranger (Better Morgage terms) were unanswered on several occasions, and others were only partially answered. We pushed through this and submitted and responded to almost 100 questions from Better Morgage which some were repeated over, and over again. In the end, it was sent to closing where someone else took over. He got everything together, responded to emails almost instantly and closed out the loan process.

    Side note, if I had someone new at the end closing my loan, then why did my loan ranger have to put closing loans ahead of my loan, if her job was to get loans to the closing agent?

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

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    Comments (1)
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    • Aug 24, 2018

      John Moffatt,

      Hi Nasir, thanks so much for your feedback. We appreciate both your positive and constructive comments, there's always room to improve, and we'll keep at it. We hope we can better serve any mortgage needs you may have in the future.

      Sincerely, John Moffatt (Head of Loan Origination)

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  • Amazing experience

    • New Jersey,
    • Aug 14, 2018
    • Verified Reviewer

    Buying a house is extremely stressful. Especially if you're like me buying a house for the first time. I was recommended to Better.com just to get pre-approved. After speaking with Elizabeth and shopping around, I decided to use Better for my mortgage.

    The process could not have been easier and there are different staff members that are assigned to you along the way that are experts in the stage of the process that you are in. Everything is simplified online and you are given tasks to complete.

    It really couldn't have been easier, and I'm very happy that I chose to go with Better.com. I highly recommend them to anyone buying a house, especially a first time home buyer.

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

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  • Very honest company and fast response

    • New London, CT,
    • Aug 6, 2018
    • Verified Reviewer

    I apply online and I have a good experience and fast answer. It is sad that I have to stop the proses because of a personal situation, but I will apply again soon. Thank you and God bless. I hope that I can apply soon, see you soon.

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

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  • Great online service

    • Texas,
    • Aug 5, 2018
    • Verified Reviewer

    I am a first-time home buyer and live in technology. Email and text messages (and chat) are my part of every minute.

    And Better Mortgage plays right in there.

    The initial sales/education call was super useful. As a first-time home buyer, I had many questions and each was answered in a patient manner.

    Once the sales process was over, the loan officer took over. And it was a very interesting (in a positive way) experience. All document submission was through a very effective workflow process. But I want to mention here that Sarah, my Loan Ranger, was super helpful. Again as a first-time buyer, I asked every small question and she responded promptly without being frustrated. Also in my case, they needed to verify my India employment, which took some time, but she was patient and supportive. She even helped me with friendly advice about other parts of the home purchase. I give huge credit to her for successful funding of the loan.

    They do require a lot of documents, but because of the online interface and super responsive staff, it was not stressful.

    After underwriting, the closing manager was also helpful.

    Overall I am quite satisfied with the whole experience.

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

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Showing 1-11 of 61

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