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Higher Mortgage Assessment | Mortgage Lenders

Better Mortgage’s online lending platform features a streamlined mortgage loan application and underwriting process, lower closing costs and in-house real estate, settlement, inspection and insurance services.

Keep reading to find out more about the company’s loan options, lending criteria and credentials. We also get into how it performs in terms of customer satisfaction.

Table of Contents

Better Mortgage’s Services
Better Mortgage’s Credentials
Better Mortgage’s Accessibility
Better Mortgage’s Customer Satisfaction

Better Mortgage Mortgage Lenders Overview

Pros

No application, underwriting or origination fees

Online pre-approval

Offers FHA loans, VA loans and a cash offer program

Will match competitor’s rates

$2,000 guarantee if the closing is delayed due to lender error

Cons

No physical branches

Manufactured home loans are limited to refinance customers

No USDA loans or HELOCs

Better Mortgage’s platform makes the online application, underwriting and closing more efficient. Customers can get pre-approved, lock the interest rate and submit the application entirely online with the guidance of a licensed loan officer. The final step — signing and closing — must be done in person at a notary’s office.

According to a company representative, customers typically benefit from lower rates and lower closing costs. As an online-only bank, the lender has lower operating costs and it doesn’t charge lending fees (application, origination or underwriting). Borrowers also work with non-commissioned agents and avoid paying high commission fees.

In terms of loan options, Better Mortgage offers adjustable and fixed-rate conforming loans, jumbo loans and two government-insured mortgages: FHA-backed loans for first-time homebuyers and low income borrowers and VA loans for veterans.

Finally, Better Mortgage offers to match a competitor’s lower rate and credit the borrower $100. To qualify, you must send Better the competing loan offer within one business day from its issue date. See the guarantee’s fine print for more information.

The lender also offers to pay $2,000 if loan closing is delayed due to company error (terms and conditions apply).

Better Mortgage’s Services

In this section, we list Better Mortgage’s loan products, qualification requirements and applicable costs and fees. You’ll also find short descriptions of Better’s affiliate companies and what they offer:

How to qualify for a loan with Guild Mortgage:

Minimum credit score requirements:

Conforming loan – 620
Federal Housing Administration (FHA) loan – 540
Department of Veteran Affairs (VA) loan – 620
Jumbo loan – 700
Manufactured home loan (refinancing only) – 600

Maximum debt-to-income ratio:

Conforming loan – 50%
FHA loan – 50%
VA loan – 41%
Jumbo loan – 43%

Certain compensating factors may prompt the lender to accept higher debt-to-income (DTI) ratios: excellent credit history, significant cash reserves, a sizable down payment and a stable job history.

Minimum down payment requirements:

Conventional loan – 3% to 25% depending on the property type and whether it’s a secondary residence or investment property
FHA loan – 3.5% to 10%, depending on your credit score
VA loan – 0%
Jumbo loan – 10.01%
Manufactured home loan (refinance only) – 0%, 3.5% or 5% depending on the loan type

Required documentation

To process a loan application, Better Mortgage requires the following:

Bank statement from the past two years
Assets: cash assets (cash, savings accounts, certificates of deposits), physical assets (real estate, cars, boats, valuable jewelry, etc.), non-physical assets (investments, retirement accounts, pensions, royalties)
Tax returns from the past two years (W-2 and 1099 forms)
Business tax returns from the past two years (if you own 25% or more of a business)
Employment history
Credit score and credit report
Valid ID and Social Security card
Child support, alimony or down payment gift letters, if applicable
List of monthly debt burdens: rent, mortgage, other loans and medical bills

Costs and fees

According to the company website, closing costs with Better Mortgage ranged from $1,500 to $3,500 in the past year.

Better Mortgage doesn’t charge lending processing fees such as:

Application fees
Origination fees
Underwriting fees

However, applicants must pay for standard mortgage application services such as:

Appraisal – if required, $550 (non-refundable)
Credit report – $25-$50
Flood certification – $14
Recording fees, which are charged by state and local agencies

Additionally, these are the estimated costs for services provided by Better Mortgage’s subsidiary companies:

Better Real Estate – 0% to 3% of the home sales price for relocation services, 2.5% of the home sales price in case of clients who don’t borrow from Better Mortgage and buyer advance payment (rental costs, HOA fees and property taxes).
Better Settlement – title insurance and settlement service ($1000 – $2000, depending on loan type and loan amount)
Better Inspect – home inspection ($350-$400)
Better Cover – 5% to 15% of annual property and casualty insurance premium

What Better Mortgage offers

Better Mortgage offers the following:

Loan types:

Fixed-rate mortgage
Adjustable-rate mortgage
FHA
VA
Conventional mortgage
Jumbo

Loan terms:

15-, 20- and 30-year mortgages

Types of properties

Better Mortgage can finance the purchase of the following properties:

Single-family homes
Multi-family homes (up to four units)
Townhouses
Condominiums
Planned Unit Development (PUD)
Manufactured homes (conventional refinancing only)

Additional services and programs

In line with its goal to be a one-stop shop mortgage lender, Better Mortgage offers additional services related to the mortgage loan process through subsidiary companies. However, customers aren’t obligated to use these and are free to shop around for their preferred provider.

Better Mortgage’s affiliate companies include:

Better Real Estate – Borrowers who work with a Better real estate agent may qualify for a lower down payment and $2,000 off their closing costs. Available nationwide.

Better Inspect – According to the company, Better Inspect home inspections may be ready in as little as 24 hours and come with a 100-day guarantee.

Better Home Card — Better Mortgage customers can apply for an unsecured personal loan to finance home renovations. Loan terms are 3 to 5 years.

Better Cover – Digital insurance agency that partners with 15 insurance underwriters to offer several insurance policies, including auto, life and homeowners insurance. Available nationwide.

Better Settlement Services – Shop for title insurance and connect with a mobile notary or attorney. Available nationwide.

Cash Offer Program – The program facilitates cash-only purchases in competitive markets. To qualify, you’ll need to work with a Better Real Estate agent.

Although Better is a licensed lender nationwide, some of the services mentioned above have limited availability:

Cash Offer Program is available in Alabama, Arizona, California, Colorado, District of Columbia, Florida, Georgia, Illinois, Maryland, Michigan, New Jersey, North Carolina, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and Washington.

Better Inspect is available in California, Charlotte Metro, Dallas-Fort Worth Metro, New Jersey, Raleigh-Durham Metro, Seattle Metro, Tampa, Miami, Fort Lauderdale, and Orlando Metro, Denver/Colorado Springs Metro and Portland Metro.

Better Home Card is available in Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Kansas, Kentucky, Louisiana, Maine, Michigan, Missouri, Montana, Nebraska, New Jersey, New Mexico, North Carolina, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota, Texas, Utah, Virginia, Washington, West Virginia, Wyoming and Washington, D.C.

What Better Mortgage doesn’t offer

Better Mortgage doesn’t offer the following loan types:

USDA loans
Home equity loans (HELOCs)
Commercial property loans
Construction loans

Better Mortgage’s Credentials

Better Mortgage is licensed nationwide and backed by the following financial institutions: Ally Bank, Citi Bank, Goldman Sachs, SoftBank, Pingan Bank, KPCB and American Express.

Licenses and Registrations

Better Mortgage is a licensed mortgage originator and servicer in all 50 states and Washington, D.C.

Awards and Certifications

Better Mortgage ranked seventh in J.D Power’s 2021 U.S Primary Mortgage Origination Satisfaction Study.

Third-Party Ratings

Financial ratings from credit rating agencies such as Standard & Poors, Fitch and Moody’s are currently unavailable because the lender doesn’t sell its loans into securities.

Regulatory or Legal Actions

In 2022, a former Better.com executive filed a lawsuit alleging that Better Mortgage and its CEO, Vishal Garg, misled investors regarding the company’s profitability and violated securities and labor laws. The Securities and Exchange Commission (SEC) is currently conducting an inquiry into these allegations.

The company, listed as Better Mortgage Corporation, was subject to five regulatory actions from the National Mortgage Licensing System (NMLS) between 2016 and 2021:

In the state of California, the lender failed to submit its 2019 annual report before the March 15, 2020 deadline. The Commissioner of Business Oversight revoked the company’s lending license on April 3, 2020, and on April 8, the lender submitted the report, paying an administrative penalty of $5,000.

In 2019, the state of North Carolina denied the renewal of Better Mortgage’s lending licenses. The regulatory action states the lender acted in violation of the North Carolina Secure and Fair Enforcement Mortgage Licensing Act (NC SAFE Act) and submitted false or misleading reports regarding the number of mortgage loans it had originated during the fourth quarter. The state issued a penalty of $25,000 and renewed the lender’s license, provided the lender complies with the NC SAFE act and submits all missing reports retroactively.

In 2015, the state of Oregon found that Better Mortgage, named Avex Funding Corporation (AFC) in the documents, engaged in activities that violated the Oregon Mortgage Lender Law. The company failed to submit a written response regarding deficiencies found in its mortgage books and records. In 2016, the lender agreed to pay a civil penalty of $1,000, as well as $600 to cover additional examination expenses.

In 2020, Pennsylvania’s state licensing agency found that Better Mortgage violated the Mortgage Licensing Act (MLA). The company acted as a mortgage servicer without the license to do so and agreed to pay a $65,900 fine.

A 2021 agreement with the state of Washington states that the lender agreed to provide additional training to employees regarding compliance with the Consumer Loan Act of Washington. Additionally, Better Mortgage agreed to pay an $80,000 fine to the state and a $7,000 investigation fee.

Although we always try to include accurate and up-to-date information on regulatory and legal actions, we don’t claim this information is complete or entirely up to date. We recommend you do your own research, as well.

Better Mortgage’s Accessibility

Better Mortgage’s website is well-equipped with online tools, educational materials and responsive customer support available 24/7.

Availability

Better Mortgage can originate and service a loan in all 50 states and D.C. However, the company is an online lender, which means that there aren’t retail branches or in-person services.

That said, getting in touch with the company and talking with a live agent is easy through phone, email or chat. We used the company’s online chat support during our research, and live agents were available to answer all our questions.

Contact Information

Customers can contact Better Mortgage:

24/7 online chat support with a live agent
Call 415-523-8837
Email at [email protected]

User Experience

Better Mortgage’s landing page prompts users to apply for mortgage pre-approval (home purchase or refinance). At this point, the lender will not conduct hard inquiries on your credit report. Once the lender issues the pre-approval letter, you’ll get a loan estimate and have the chance to lock in your preferred interest rate. A licensed loan officer will guide you through the online application process.

According to the lender, once the loan is cleared for closing, the entire process may take three to seven business days (including the mandatory three-day ‘cooling off period’ between loan disclosure and final signing). Then, Better Mortgage will connect you with a local notary to finalize the loan documents in person.

If you’re refinancing, you’ll be able to sign most of the closing documents digitally through e-closing and shorten the final in-person closing appointment.

After closing, you’ll make mortgage payments to Better Mortgages servicing partner, The Money Source, until the lender permanently transfers your loan to one of its partner servicers.

Better Mortgage’s learning center tab is equipped with plenty of educational materials about mortgages, insurance, information and investing, as well as a thorough Frequently Asked

Questions section that addresses:

COVID-19
Better’s application, underwriting and closing process
Better’s loan types and products

Finally, the lender also offers the following online tools:

Mortgage calculator
Cash-out refinance calculator
Monthly payment calculator

Limitations

Better Mortgage doesn’t have brick-and-mortar locationsnor does it offer in-person customer service. Homebuyers prioritizing face-to-face interaction with their loan officer are best served by a different mortgage lender.

The lender offers 24/7 online chat support. Email and phone customer service operate seven days a week on the following schedule:

8 a.m. to 9 p.m. Eastern Time (ET) Monday through Friday
9 a.m. to 9 p.m. Eastern Time (ET) Saturday and Sunday

Better Mortgage’s Customer Satisfaction

Customer satisfaction with Better Mortgage’s services is high overall, based on reviews on TrustPilot, the Better Business Bureau (BBB) and the Consumer Financial Protection Bureau (CFPB).

The negative reviews on TrustPilot and the BBB are a mixed bag: several complaints address negative experiences with the lender and its service but many other users submitted poor ratings due to the company’s recent scandals regarding employee layoffs.

Customer Complaints

From 2016 to 2022, Better Mortgage customers filed 271 complaints with the CFPB. Most customers cite problems with the refinance or purchase application, while issues with loan closing rank second. Many complaints (252) were addressed and closed with an explanation from the company.

Better Mortgage has a 4.2/5 star rating on TrustPilot, based on 1,450 customer reviews and 75% of reviewers rate the lender as excellent. The BBB displays similar results, despite a slightly smaller sample size. The company earned an average star rating of 4.1/5 based on 988 customer reviews.

Reviewers on both platforms praise the company’s website, responsive customer service, application process, low interest rates and reduced closing costs.

Negative reviews cite closing delays that resulted in financial losses, slow loan settlement process, lost documentation, hidden fees and inexperienced agents.

Third-Party Ratings

Better Mortgage ranked above the industry average in J.D Power’s 2021 U.S Primary Mortgage Origination Satisfaction Study. The company earned 859 points on a 1,000-point scale, slightly higher than the industry average of 851.

The BBB awards Better Mortgage a rating of B. This grade is awarded separately from the customer reviews mentioned above, as it evaluates the company’s responsiveness to customer complaints submitted to the BBB.

Better Mortgage FAQ

Who owns Better Mortgage?

Better Mortgage is privately owned by Vishal Garg, its founder and current CEO. The company was set to go public in 2022 but the deadline has been pushed back several times and is now delayed to March 8, 2023.

How long does Better Mortgage take to process my loan application?

According to the lender, pre-approval letters may be issued in as little as three minutes and loans close in 32 days on average. Although this data isn’t verified by a third-party, positive consumer reviews on TrustPilot and the Better Business Bureau noted that the lender’s online lending platform is streamlined and efficient.

How do I contact Better Mortgage?

Customers can contact Better Mortgage by phone, email or through the lender’s 24/7 customer support online chat with live agents.

How We Evaluated Better Mortgage Mortgage Lenders

Our evaluation of Better Mortgage starts with a list of the company’s loan products, services and lending requirements. Next, we searched for relevant awards or third-party ratings, as well as any regulatory and legal actions against the company.

To evaluate the lender’s accessibility, we explored its online platform, reviewed the application process and sent queries to customer service reps.

We also read customer reviews and complaints across three platforms: TrustPilot, BBB and the CFPB’s consumer complaint database.

Lastly, we scheduled a short interview with Vishal Garg, Better Mortgage’s CEO and founder, to better understand how the company serves homebuyers and what sets it apart from traditional mortgage lenders.

Summary of Money’s Better Mortgage Review

Better Mortgage made it to our list of best mortgage lenders because it offers an efficient online lending platform for tech-friendly homebuyers. Users can apply for pre-approval, lock their interest rate, submit their loan application and potentially close the mortgage faster than a traditional mortgage lender.

Better Mortgage’s website features responsive customer support and plenty of educational materials. That said, we don’t recommend the lender for customers that prefer in-person service because it operates only online.

Finally, the lender also covers other steps in the mortgage process — real estate agents, title insurance, settlements, property insurance and home inspections — through its network of subsidiary companies. Acquiring these services in-house may further speed up the mortgage underwriting process and as well as reduce the overall closing costs.

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