Better Mortgage Review: Guaranteed Low Price and All Digital Experience

Better is a great fit for home buyers and refinancers who are looking for transparency during the mortgage process and a lender that offers competitive mortgage rates. Another value-added perk is that Better closes faster than the industry average. Better's digital experience helps the lender provide fast service and low rates. This Better review will highlight the pros and cons and help you figure out if the lender is right for you.

Full Better review

This mortgage lender is a good fit for: Homeowners who want to refinance to a lower interest rate while cutting costs. Better is also great for borrowers who want to save on fees.

Top perks

Low rates and price guarantee

Better already consistently beats many mortgage lenders' rates, but its price guarantee ensures the lender will beat competitors. Better will match a competitor's offer and attempt to beat it by $100. If the lender can't, the $100 is yours to keep.

$150 off closing costs

Apply through The Ascent site and receive a $150 discount for closing costs or closing costs for refinancing. This exclusive perk can help you keep more money in your pocket and reduce the cost of already low fees that the lender offers.

'Better One Day Mortgage' and $1,000 off closing costs

Better's One Day Mortgage program allows qualified borrowers to apply, get pre-approved, lock their rate, and get a loan commitment letter within 24 hours. The letter is a "conditional underwriting determination." It's not final approval of your loan, but it means Better expects to approve your loan. There's a monetary bonus, too. Qualified applicants who get all the required paperwork submitted within four hours after the rate is locked can get $1,000 toward closing costs.

Few fees

Many mortgage lenders charge for the privilege of getting a loan. Better charges no unnecessary fees, helping you save on your overall closing costs, which can range anywhere from 0.5% to as high as 2% depending on the lender.

Quick loan estimates and pre-approval

Better offers both rate quotes and pre-approval letters within minutes, making it easier to shop around for lenders efficiently. Prospective homeowners can also take action faster on a new home purchase in a competitive market. Other lenders can take upward of a few days to issue a pre-approval letter.

When you make an offer on a house, you can make your bid more competitive because sellers will see that you're fully underwritten. In other words, Better's pre-approval letter can help you stand out since it shows you're more financially ready to make such a large purchase.

Better Cash offer

Better is expanding its offerings beyond a traditional mortgage lender with its Better Cash program. For new home buyers, Better Real Estate will put up the cash for the purchase, which can make for a more competitive bid when many buyers are making offers on a single home. Better Cash is also available when selling your home.

In these cases, Better Real Estate buys your home with cash. While these services can be valuable it is important to understand the programs before diving in. Here's why: it's common that cash offers to buy your home will be lower than other financed offers. But of course, if you need to sell fast, a program like this can be convenient.

Lock in your interest rate on demand

Applicants can lock in their interest rate whenever they want during the loan process, and at any time of day or night. Better will hold the mortgage rate for you so you can complete your application with the knowledge that it won't change by the time you close on your home.

Digital application process

It's clear why Better is one of our top-rated online mortgage lenders: Most of the closing process is done completely online (with the exception of signing the final documents). Simply fill out the online application form and submit any necessary documents using the lender's secure system.

Also, Better's technology allows you to get a rate quote in seconds, and a pre-approval in minutes.

Access to a dedicated loan officer

Once you complete the pre-approval process, you'll be assigned a Home Advisor and will receive their contact details. You can contact this person during office hours throughout your loan application process. If you need help outside of office hours, live support is available by phone, email, and chat most days of the year.

Better mortgage loan officers don't earn commission, so they aren't incentivized to steer you to a loan bigger than what you need.

Discounts available

Borrowers can receive up to $2,000 in lender credits through the Better Real Estate discount program, plus a refund of 1% of the home's sale price. To be eligible for both benefits, you'll need to choose Better Mortgage Corporation as your mortgage lender and a real estate agent who was referred to you by Better.

Line of credit

The Better Home Card is an unsecured, fixed-rate personal line of credit up to $50,000. You can access the funds during the first year you have the card, and then you'll start the 3-5 year repayment period. The line of credit takes the form of a Mastercard, but you can also access your funds via cash or checks.

Interestingly, applying for a Better Home Card won't affect your credit. The issuer will run a soft credit check to process your application.

Bundled services

Better now partners with real estate attorneys and title insurance and home inspection providers, and has a tool that helps you compare and buy insurance policies. These services are additions to the real estate buying and selling services Better already offered.

What could be improved

Limited loan product availability

Better doesn't yet offer a comprehensive menu of mortgage loan products that covers all borrowers and all scenarios. You won't find a VA loan or USDA loan. Better also does not offer specialty loans such as construction loans or bank statement loans.

No home equity loan

Better doesn't yet offer a home equity loan. They do offer the unsecured line of credit for up to $50,000, but you'll need to look elsewhere if you want to borrow more than that by leveraging your home equity.

If you want to customize your mortgage term: Rocket Mortgage is one of the most well-known lenders in the mortgage space, and it offers customization options (you can choose a term anywhere from 8 to 29 years) for applicants with a wide range of credit scores.

If you want low fees: You can get an Ally Mortgage and avoid some of the fees many other lenders charge. Ally doesn't charge an application, origination, processing, or underwriting fee. Like Better, Ally offers a 3% down payment mortgage.

Qualifying for a Better loan depends on your financial situation. Underwriters look at the amount of debt you have, your credit score, and other factors to determine the likelihood that you'll pay your mortgage on time.

Better offers loans with allowable debt-to-income ratios as high as 50%.

For a conventional loan or FHA loan from Better, you need a FICO? Score of at least 620, but you'll need to have a higher score if you want the best interest rate. And you'll need a 3% down payment (3.5% for FHA loans).

If you want a jumbo loan, you'll need a 700 credit score and a 10% down payment -- and your DTI should not exceed 43%.

Besides a qualifying DTI, credit score, and down payment, you need to have cash reserves. This is a requirement for virtually any mortgage. It can be satisfied with money in savings or some other asset that could be converted to cash. For example, if you have a 401(k), the lender will usually allow about 70% of the balance to be considered cash to meet the reserve requirement. At Better, you don't need reserves to qualify for a conventional loan, just the closing costs and down payment. But if you want a jumbo loan, you should have at least six to 24 months' worth of expenses set aside. The exact number depends on your loan amount.

Better makes home loans in amounts between $50,000 and $4,000,000.

Better refinance rates tend to at least match the competition. They trend about the same as the national average. Where Better will save you money is in the fees.

Better's rates trend a little lower than the national average. The lowest mortgage interest rate incurs a fee in the form of mortgage discount points (that's normal for mortgage lenders). Points are prepaid interest that you can pay up front to lower the interest rate for the life of the loan. One point costs 1% of your loan amount and buys your rate down by 0.125% to 0.25%. When you compare rates, be sure to look at the details of their price tag.

Better is one of the most competitive lenders we've seen, considering it offers a faster loan process and fewer fees than most.

It could be a good fit if:

• You're refinancing. Better offers some of the most competitive refinancing rates we've seen.
• You don't like paying extra fees. Better doesn't charge unnecessary fees -- so you can keep that money for other housing expenses, like moving or buying furniture.
• You want a high-quality digital experience. With an online application and the ability to underwrite your loan using automated technology, the process can be fast and easy.