Better.com Review

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1 Minute Review

Better.com is a digital mortgage lender. It sets itself apart from other lenders by not charging origination fees. Better Mortgage’s loan officers aren’t paid on commission, like some loan officers are. This means their priority is putting you in the best mortgage for you. Better Mortgage aims to simplify and streamline the mortgage process — and it’s successful in that goal.

Best For

  • An online experience
  • First time home buyers
  • Jumbo mortgages
  • Quick pre-approval

Pros

  • A user-friendly online application
  • Dedicated loan officers
  • Pre-approval in as little as 24 hours
  • No application or origination fees

Cons

  • Not available in all 50 states
  • No VA or USDA mortgages
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Who’s Better.com for?

Better.com is for home buyers who appreciate an online mortgage experience. You don’t need to visit an office to discuss mortgage options. If you need help, you can call or email a loan officer. Better.com offers an intuitive interface that walks you through the application process. This allows even first time home buyers to feel confident about the process.

Better.com is also a good fit for repeat homebuyers who’ve been frustrated by a slow mortgage process in the past. It also offers refinance mortgages for homeowners looking for a better rate. 

Better.com has its limitations. It doesn’t offer home equity lines of credit. It also doesn’t offer mortgages for manufactured homes, co-ops, multi-family homes with 5 or more units or mixed-use properties. 

Better.com Mortgage Products

Better.com offers several mortgage products. You can work with your loan officer to find the right mortgage for you. Its products include:

  • FHA: The Federal Housing Administration insures FHA mortgages. FHA mortgages require a low minimum down payment of 3.5%. Lenders for first-time homebuyers often recommend FHA mortgages. 
  • Conventional: A conventional mortgage isn’t backed by a government agency. You may need to pay for private mortgage insurance if you make a down payment of less than 20%.
  • Jumbo: A jumbo mortgage is a product used to purchase higher value properties. Better Mortgage offers an option that allows you to pay 10% down on a jumbo mortgage with no mortgage insurance. 
  • Refinance: A refinance mortgage allows you to pay off your current mortgage. You get a new mortgage for the same property, but with a better rate or terms that are a better fit. Let’s say you have a 30-year adjustable-rate mortgage. You might refinance to get a 30-year fixed-rate mortgage. Or you might refinance to get a 15-year mortgage and pay off your loan sooner. 
  • Fixed rate: A fixed-rate mortgage has the same interest rate for the entire term of your mortgage. Your mortgage term is how long your mortgage will last if you pay the minimum required monthly payment. A 30-year fixed-rate mortgage will have the same interest rate for all 30 years. 
  • Adjustable rate: An adjustable-rate mortgage has an interest rate that changes. It typically starts with a fixed introductory rate. With a 5/1 ARM, you have a fixed rate for the first 5 years. After that, your rate would adjust up or down once per year. 

Your Better.com loan officer will help you determine the best mortgage for your needs. 

Average Days to Close Loan

Better.com averages 21 days to close on a mortgage. Here’s what the Better.com’s loan process looks like:

  1. Basic preapproval: You can receive a basic pre-approval letter in a few minutes by providing income information. This gives you a rough idea of how much you could be approved for to purchase or refinance a home. 
  2. Verified preapproval: You upload your documents to Better Mortgage. The company reviews your documents and generates a verified pre-approval letter. You review the letter and decide if you want to move forward. 
  3. Rate lock: Better Mortgage generates a list of tasks for you to complete. You can lock in your rate once you’ve completed your tasks. Locking in your rate means you’re guaranteed to have the quoted interest rate as long as you complete the rest of your tasks on time. 
  4. Underwriting: Better Mortgage sends out an appraiser to assess the value of your home. It will also do a title search to make sure that you can buy a house without any legal complications. Better Mortgage will also make a final decision on whether to approve you for the mortgage. 
  5. Closing: You complete your mortgage paperwork and pay your down payment and closing costs. On the plus side, Better Mortgage won’t charge you an origination fee. You may need to pay for the title search, however. 

Better.com keeps you updated on your mortgage status throughout the process. 

Better.com Mortgage Credit Score Minimum

Bette.com requires a credit score of 620 or higher. Your credit score is a 3-digit number that gives lenders a snapshot of your credit history. Your credit history includes:

  • Your credit utilization: This is how much credit you’ve used compared to how much you have. Let’s say you have a credit card with a $5,000 limit and a balance on that card of $3,000. That’s 60% credit utilization; you’ve used 60% of your available credit. Lower credit utilization is best. Try to keep your credit utilization to 30% to boost your credit score. 
  • Your payment history: This is a record of whether you’ve paid your credit cards, vehicle loans, student loans and your mortgage on time. On-time payments boost your score. Accounts in collections put a significant dent on your score. Negative items on your report drops off over time. 
  • The age of your credit: The older your credit is, the better. This isn’t as impactful to your score as your payment history and credit utilization. 
  • Your credit inquiries: When lenders and credit card issuers do a “hard” credit pull, it lowers your score a little. This factor doesn’t have a significant impact on your score.

Why does your credit score matter? You may be offered a lower interest rate if you have a higher credit score. A lower interest rate saves you money. You also need to meet Better.com’s minimum to get approved for a mortgage. Borrowers with a score below 620 may need to take steps to improve their credit to get approved for a Better.com mortgage loan. 

A small difference in the interest rate might not seem like a big deal. Mortgages are large financial transactions, though. Even a difference of 0.5% can cost thousands over the life of a home loan. If you qualify for a mortgage, you can also refinance later as your financial situation improves. You’re not stuck with the same rate forever. 

Preapproval Documents

Borrowers need to submit documents to get a verified preapproval. Getting these documents ready before you apply can help smooth out the entire process. For verified preapproval, Better Mortgage requires:

  • Your most recent paystub
  • Your most recent W-2
  • Your most recent tax return

If you are self-employed, receive contract income or earn revenue from a business, you will need:

  • Your most recent 1099s
  • K-1 statements, if you own part of a Partnership or S-Corporation
  • 2 years of business tax returns, if you file or receive them
  • 2 years of personal tax returns

You may also need to provide a year-to-date profit and loss statement if your business income can’t be verified. If you receive income from other sources, like rental income, child support or alimony, you may need to provide additional documentation. 

Better.com mortgage will look at your debts. It gets a lot of this information from your credit report, but you might need to provide documentation, too. You may need to provide statements for any recent accounts that aren’t on your credit report, for example. 

Better.com mortgage will also need to confirm your assets. To do this, it will need at least 2 months of complete bank statements. You will also need to provide documentation for any unusual, large transactions. Let’s say you took money out of an investment account for your upcoming down payment. In this case, Better Mortgage would want to see your investment account statement to confirm the transaction. 

It could seem like a lot of information, and it is. This verification is to protect you, the borrower. Lenders want to be sure that borrowers can afford their mortgages over the long term. 

Customer Service

Better.com has support staff available 7 days per week from 9 a.m. to 9 p.m. EST. Email general questions at hello@better.com, or call them at 415-523-8837. 

After borrowers complete the basic preapproval process, they are assigned a loan officer to guide them through the process. Borrowers can directly call or email their loan officer. Better.com doesn’t offer a mobile app. It does, however, have an up-to-date and user-friendly website.

Should You Get a Loan From Better.com?

Better.com is one of the best mortgage companies when it comes to digital mortgages. One of Better.com’s unique features is its Better Price Guarantee. The Better Price Guarantee says that it will beat a competitor’s offer by at least $1,000 or it will pay you $1,000. The price guarantee applies to closing costs for a mortgage with the same rate and terms (excluding property taxes and insurance). It also only applies to mortgages of $500,000 or less. 

Better.com offers a user-friendly mortgage process. You can upload and sign all your documents through its secure website. If you prefer working with someone face-to-face, Better.com might not be the best fit for you. If you like being able to complete the mortgage process in your pajamas, though, it’s worth checking out Better.com.