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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46 Consumer Reviews for Better Mortgage

Average Consumer Rating: 3.6
Rating Snapshot:
5 star: 28 4 star: 2 3 star: 1 2 star: 1 1 star:  14
Bottom Line: 67% would recommend it to a friend
Showing 1-11 of 46
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  • Almost perfect service. Really good website and process.

    • Georgia,
    • Jul 5, 2018
    • Verified Reviewer

    Five stars and (almost) perfect service.

    Along the journey with the loan, being my first purchase, I was lost and confused. Better.com has very well prepared people for the different stages of the process.

    The website is also a very good tool they have. It is clear, simple and has helpful information. The information is updated almost immediately, which allows you to be aware of what's happening.

    The "almost" perfect comes from the unexpected change of people working with me. I had at least four people working on my loan in the different stages, and as I stated, each one of them is an expert in their field, but those changes got me by surprise. I wish I knew that was coming.

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

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  • This lender misrepresented the necessary documents and effort to comply with silly requests

    • Spicewood, TX,
    • Jun 29, 2018
    • Verified Reviewer

    They told me there would only be basic documents like tax returns, bank statements, and proof of income and the like. They made 65 requests and wanted documents that do not exist and even asked for tax returns of publicly traded companies where I owned a few shares in my retirement account. They did not return calls, and you feel like you are dealing with a machine. The problem may be a lack of life experience by their employees, but regardless it was a terrible experience. They even missed an agreed deadline on my loan disclosure.

    You are better off dealing with a local lender, even if the rate is a little higher.

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

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    • Jun 29, 2018

      John Moffatt,

      Hi David, I’m very sorry to hear you were unhappy with your experience with us, but I'm glad that we were able to resolve the issue privately. If you have any remaining concerns, please feel free to reach out to me directly at jmoffatt@better.com.

      Sincerely, John Moffatt (Head of Loan Origination)

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  • 4 out 4 people found this review helpful

    Wasted time and poor communications

    • California,
    • Jun 22, 2018
    • Verified Reviewer

    I would not recommend. They provided a competitive loan estimate, and I really liked their online process. However, they wasted at least two months of my time. I explained from the beginning my income situation where I was receiving for two previous years a mix of cash and stock as compensation, and since then fully cash. I was told that both would be considered as income, and I should have no problems qualifying. Two months go by, and my lock gets extended because they are still working on it. Then it comes back as they can't get it through underwriting because they won't accept my stock compensation as income. Something they should have been able to determine at the very beginning.

    Overall poor communications once the loan process started. My "loan ranger" was a very poor communicator and not responsive. I am now closing with another lender; I wish I had not wasted time and effort with "Better."

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

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    • Jun 22, 2018

      John Moffatt,

      Hi John, I'm sorry to hear you were unhappy with your Better experience. Because I cannot speak publicly about the specifics of your situation, please feel free to contact Better’s Head of Loan Rangers, Meg McDermott, at mmcdermott@better.com if you'd like to further discuss your experience. Sincerely, John Moffatt (Head of Loan Origination)

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  • 4 out 4 people found this review helpful

    Awful company

    • Sanford, FL,
    • Jun 18, 2018
    • Verified Reviewer

    I pre-qualified with this company and explained my entire financial situation, including a short sale from a few years ago. I did everything they asked - submitted all my paperwork, found homeowners insurance, paid for my inspection and even took money from my retirement account for the larger down payment they were requiring. Three days before closing they refused to fund the loan, and everything had to be canceled. Be very wary of this company!

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

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    • Jun 19, 2018

      John Moffatt,

      Hi Michelle, I'm sorry to hear you were unhappy with your Better experience. Because I cannot speak publicly about the specifics of your situation, please feel free to contact Better’s Head of Loan Rangers, Meg McDermott, at mmcdermott@better.com if you'd like to further discuss your experience. Sincerely, John Moffatt (Head of Loan Origination)

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  • Excellent services

    • Connecticut,
    • Jun 17, 2018
    • Verified Reviewer

    The Better Mortgage staff was excellent! The online portal to upload your documents and see where you are in the process was very helpful. Our loan ranger, Sarah, was incredibly helpful, responsive and kind. She understood the stress of putting together a loan application and never left us in the dark. She emailed when she needed additional information. The fact that you can schedule calls with the staff was great! I would recommend this service to anyone!

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

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  • Mortgage

    • Dallas, TX,
    • Jun 13, 2018
    • Verified Reviewer

    The mortgage lender market is very competitive and so much terminology to be aware of. The team at Better Mortgage guided me through the entire process in layman's terms. Other lenders were trying to rush me to make a decision without explaining all the fine print. This is so very helpful and saved me money in the long run.

    Additionally, I work during the day, so it was a challenge to get a hold of loan officers at other lenders in a timely manner. The team at Better have options to set up appointments after hours, and they are flexible with availability.

    Better will be there for you. However, you also have to be available. You have to submit paperwork and information in a timely manner. If you are able to do this, Better is a great option.

    If I had mortgage lender needs in the future, I would definitely do business with Better Mortgage. Highly recommended!

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

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  • Efficient, easy, excellent

    • Chicago, IL,
    • Jun 8, 2018
    • Verified Reviewer

    The Better Mortgage online loan application process using their web portal was very efficient because it walks you through steps to complete with email notifications at every stage of the loan. The completely paperless process is very easy and they back all this up with excellent support from their staff - both electronically and over the phone. As long as you are somewhat tech savvy and can handle internet-based applications and email-based communications and meeting schedules, you will find the whole process to be very smooth.

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

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  • Excellent experience and great rate!

    • Dallas, TX,
    • Jun 6, 2018
    • Verified Reviewer

    We were leary using an online financing option, but Better Mortgage made the process pretty easy. It was easy to download documents, and we were always able to talk to the person we needed to both by phone and email with very good response time. We got a much better rate locked in and received a credit instead of paying points. They were also able to process the loan within our short 21-day time frame. We would highly recommend Better Mortgage.

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

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    • Jul 16, 2018

      John Moffatt,

      Hi Michael, it's great to hear you enjoyed various facets of the Better experience, from our competitive rates to our customer support. Thank you for choosing Better, and we wish you the best of luck in your new home!

      Sincerely, John Moffatt (Head of Loan Origination)

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  • Great service

    • Trenton, NJ,
    • Jun 1, 2018
    • Verified Reviewer

    I loved using Better Mortgage. If I didn't lose my job, I would buy it with this mortgage. The process is very easy to use. They give you markets reports for cities you want to purchase the home. They offer phone call and chatting services to help guide you to your home.

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

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    • Jul 16, 2018

      John Moffatt,

      Hi Kunal, I’m sorry your loan didn’t work out this time, but I’m so glad you enjoyed your experience with us. We can’t wait to work with you when your next home finance opportunity arises. Stay in touch!

      Sincerely, John Moffatt (Head of Loan Origination)

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  • Amazing!

    • Tucson, AZ,
    • May 31, 2018
    • Verified Reviewer

    Purchasing a home is never an easy task. Mark Walton and his team came through for me when I didn't think it was possible. Mark stayed in contact with me during the whole process. I cannot thank him enough for all of his help. I am no living in my dream home thanks to Better Mortgage.

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

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    • Jul 16, 2018

      John Moffatt,

      Hi Flora, thanks so much for your review. It's great to hear you enjoyed your Better experience, especially our customer support. It was truly a pleasure working with you. Please stay in touch!

      Sincerely, John Moffatt (Head of Loan Origination)

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  • Great experience

    • Colorado,
    • May 31, 2018
    • Verified Reviewer

    We were very pleased with the whole process. Daniel Troyan, our loan ranger, went above and beyond (even contacted us when asked when he was sick at home), and also Kendra Kelsey helped immensely, answering questions in the latter stages of funding our loan.

    The only complaint I have is the lack of any information once the loan funded. It took a week for the checks to be sent and then they were sent to us and not the companies that were being paid off. We then had to send these checks and most needed to be overnighted due to the time taken to get them to us. The cost was pretty high, and we were unhappy about this phase and cost. I feel more information and a timeline would have helped immensely at this stage.

    Overall the loan process and the people who helped us were outstanding and deserve our praise. It is only the escrow portion that was unsatisfactory and needs some major attention. We paid closing costs and then incurred extra costs for mailing the checks.

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

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    • Jul 16, 2018

      John Moffatt,

      Hi Peter, I'm so glad you enjoyed your overall experience with us! I'd also like to thank you for your feedback, as it helps us identify ways to improve our process. Our top priority is to make the mortgage process as painless as possible. We'll continue to work towards this goal so that we can better serve any mortgage needs you may have in the future.

      Sincerely, John Moffatt (Head of Loan Origination)

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Showing 1-11 of 46

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