2024: A Better Mortgage Review

Better offers low rates, no lender fees, and a rate match guarantee, making it a great option for saving money. Additionally, Better loan officers do not operate on commission, so you won't experience high-pressure tactics.

Better's nationwide availability and speedy approval process and closing timeline can help you get into your new home faster.

Although Better doesn't offer many special loans for low-income buyers, the HOPE Grant can assist eligible borrowers with up to $5,000 towards a down payment or closing costs.

Pros and cons of a Better mortgage

Better mortgage types

It offers conventional, jumbo, FHA, VA, and Fannie Mae and Freddie Mac mortgages in all 50 states and Washington, D.C., but does not issue USDA loans.

• Better offers include fixed-rate terms of 10-, 20- and 30-years.
• ARMs are mortgages that begin with a fixed rate for a specified time before adjusting at regular intervals. Better offers include adjustable rate terms of 5/6, 7/6, and 10/6.
• These loans, backed by the Federal Housing Administration (FHA), require a minimal down payment of 3.5% for borrowers with a 580 FICO score or 10% for borrowers with a 500 credit score.
• This mortgage option is accessible to veterans and service members, who can apply without needing a down payment or private mortgage insurance.
• Jumbo loans are issued for amounts exceeding $3 million.
• This mortgage, backed by Fannie Mae, requires only a 3% down payment and offers lower financing and PMI costs. To qualify, you must earn at least 80% of the area median income, have a credit score of 620, and maintain a debt-to-income ratio of 50%.
• This fixed-rate mortgage for first-time homebuyers, backed by Freddie Mac, requires only a 3% down payment and does not have any income or geographic requirements.

How to qualify for a Better mortgage

• Minimum credit score: 620 for conventional loans, 580 for FHA loans
• Minimum down payment: 3% for conventional loans
• A DTI of 50% or less is considered better.

Better mortgage fees

• Origination fee: Better does not charge an origination fee
• Prepayment penalty: Better does not charge a prepayment penalty
• Rate lock fees: Better does not charge a rate lock fee.

Better benefits and discounts

Better has a variety of unique features that benefit homebuyers.

HOPE Grant

Eligible homebuyers can receive a 2% discount on the purchase price (up to $5,000) to help cover closing costs or a down payment. To qualify, applicants must meet income requirements, have a minimum credit score of 620, and put down at least 3%. First-time buyers are also required to complete homeownership education courses.

One Day Mortgage™

Within 24 hours, borrowers who lock in their rate can receive a commitment letter from Better. In contrast, other lenders may take up to two weeks to provide final approval.

Better Real Estate discount

You can save up to $2,000 on closing costs by using a real estate agent recommended by Better Real Estate (not available in all states).

Rate match guarantee

If a competitor offers a better rate, Better will either match it or provide a $100 credit.

Better mortgage refinancing

It provides cash-out and rate-and-term refinancing in all 50 states and Washington, D.C., but does not offer home equity loans in Texas.

• Credit score: 620
• A DTI ratio of no more than 50% is preferred by Better.
• To be eligible for refinancing, you need to have a minimum of 3% home equity.
• Most refinance loans and HELOCs do not necessitate a full appraisal.

Better mortgage customer service

JD Power's 2023 Mortgage Origination Satisfaction Survey rated the loan transfer process below average. However, the loan servicing was not included in the JD Power servicer satisfaction survey. On the other hand, the loan transfer company received an A from the Better Business Bureau for corporate transparency, truthful advertising, response to consumer complaints, and other factors.

On Sundays, the customer service line is unavailable, and Better does not offer an online chat function, unlike many other providers.

How does Better compare to other mortgage lenders?

Here's how Better stacks up to two top mortgage providers.

Better vs. Guild Mortgage

Guild Mortgage offers USDA loans and physician loans, which Better does not, but Better has lower-than-average rates and no lender fees.

Guild offers a Zero Down loan option for first-time homebuyers, while Better's lowest-down-payment mortgage requires 3% upfront. Additionally, Guild's Homebuyer Express program guarantees closing in 17 days, compared to an average of 22 days with Better.

Better vs. SoFi

While both online lenders have below-average rates, Better stands out with no lender fees and a rate guarantee, giving it an edge over SoFi.

Although SoFi is a full-service bank, it offers the convenience of having all your financial accounts in one place and may even provide a customer discount. Additionally, if you work with SoFi's partner real estate network, you could receive a rebate of up to $9,500 after closing, which is a much bigger perk than the $2,000 credit for using Better Real Estate.

SoFi offers a more user-friendly experience with its app, website, online chat option, and Sunday phone hours, in addition to its strong customer service.

How do I apply for a mortgage with Better?

You can apply for a Better mortgage online or speak with a loan agent at 415-523-8837, weekdays from 8 a.m. to 10 p.m. ET and Saturdays from 11 a.m. to 6 p.m. ET. After answering basic questions about your financial history, Better will run a soft credit check and provide you with a preapproval offer in as little as three minutes.

With the One Day Mortgage option, you can obtain verified preapproval in as little as 24 hours if you provide financial documents such as tax returns, pay stubs, and bank statements. After finding the desired home, you can request a rate quote and initiate the closing process. Better estimates its average closing timeline to be approximately 22 days, significantly shorter than the industry average.

Is a Better mortgage right for me?

It is a great choice for affordability as it offers some of the lowest rates in the market and borrowers will save more by avoiding lender fees and mortgage officer commissions.

If you prefer an in-person experience and lender continuity, you may want to explore other options.

Why trust CNBC Select?

At CNBC Select, our goal is to deliver top-notch service journalism and in-depth consumer advice to our readers, enabling them to make well-informed decisions when it comes to their finances. Each mortgage review we publish is the result of thorough reporting by our team of expert writers and editors, who possess extensive knowledge of financial products. While CNBC Select receives a commission from affiliate partners on many offers and links, we create all our content independently, without any input from our commercial team or external third parties. We uphold the highest journalistic standards and ethics in everything we do.

Methodology

CNBC Select evaluates mortgage products based on various factors, such as loan types, average rates, terms, accessibility, fees, down payment options, and online services, in addition to customer satisfaction.

We also take into account data from external sources, such as J.D. Power's lender scores and Better Business Bureau ratings, in addition to our own research.

Stay up to date with CNBC Select's comprehensive coverage of credit cards, banking, and money by following us on TikTok, Facebook, Instagram, and Twitter.