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The Yahoo Finance View: Better Mortgage combines several home-buying services, including rapid loan approval, insurance, real estate, settlement services, and more, into a consolidated digital experience. It's one of the best mortgage lenders out there, especially if you're looking for a smooth online experience.

With a focus on speedy loan commitments and closings, Better Mortgage may be best suited for borrowers who live in competitive real estate markets.

First-time home buyers with limited savings might seek a lender that focuses more on borrowers with low down payments. Better seems to be appealing to home buyers with some cash saved or home equity to put into the deal.

Key benefits

"One Day Mortgage" promises a loan commitment within 24 hours of submitting paperwork and a rate lock.

Offers loans, insurance, real estate, settlement services, and more in a consolidated digital experience.

Has a traditional HELOC, as well as the Better Bank Statement HELOC that only requires bank statements from applicants. This is ideal for self-employed borrowers and freelancers.

Need to know

Published interest rates are shown for borrowers with a 20% down payment, who pay closing costs with cash, have a debt-to-income ratio (DTI) below 35%, and have a credit score of 760 or higher.

A pitch on the website says, "No unnecessary fees." There is no disclaimer explaining what the "necessary" fees are. We find that kind of language to be meaningless and, frankly, a little irritating.

Visit Better's website to get started.

Better Mortgage offers the following types of home loans:

Conventional loans

FHA loans

VA loans

Purchase mortgages

Refinance loans

Cash-out refinance loans

Fixed-rate mortgages

Adjustable-rate home loans

Jumbo loans

Investment property loans

Second home loans

Nonqualified mortgages

Manufactured home loans

HELOCs

Home equity loans

Better does not offer the following types of home loans:

USDA loans

Interest-only mortgages

Lot loans

Construction loans

Guest house loans

Energy-efficient mortgages

Renovation loans

1% down payment mortgages

Buydown loans

Bridge loans

Piggy-back loans

ITIN mortgages

Medical professional loans

What is a manufactured home, and how do you finance it?

Compared to other lenders, Better is pretty low-key in appealing to first-time home buyers.

They don't promote low-down-payment programs, however, our team found a subtle mention of a conventional 3% down mortgage. That's a go-to solution for first-timers. Better does offer VA-backed loans, which are famous for requiring no down payment, but that product is simply listed among its other loan options.

Instead, Better focuses on its speed in issuing a loan commitment and a digital loan process.

MORE: See our list of best lenders for first-time home buyers.

For homeowners who aren't ready to move but would like to access some of the equity in their home, Better offers four options:

Cash-out refinance

Home equity line of credit (HELOC)

Bank Statement HELOC

Home equity loans

If you’re happy with your current mortgage rate, a cash-out refinance might not be the best option. However, a second mortgage, such as a HELOC or home equity loan, could be a good option for tapping into your home equity.

But a HELOC is. You draw the money you need from a line of credit, so you're only paying interest on the balance you owe. You don’t have to replace your entire first mortgage with a new one as you would with a cash-out refi. And Better allows you to draw up to $500,000, or 90% of your home's value.

Better also recently launched a Bank Statement HELOC, which only requires bank statements from applicants. This is great for self-employed borrowers, and one reason Better is one of the best HELOC lenders right now.

However, it also doesn't require you to submit tax returns or profit-and-loss statements, so the Bank Statement HELOC could also benefit those with fluctuating income who need flexible qualifying guidelines or whose income has changed recently and hasn't been reflected on their latest filed returns.

Yahoo Finance Tip: One downside of the Better HELOC is that you must draw at least 75% of your credit limit or a minimum of $50,000, whichever is greater. That greatly degrades the flexibility of only paying interest on the balance you owe. For example, what if you have $50,000 worth of credit but only want to draw $10,000 initially? With Better's HELOC, you're out of luck.

Better's home equity loans close in as few as three days, and you can expect to receive funds in about a week. It also allows you to borrow up to $500,000.

In a drill-down disclaimer, Better Mortgage provides a list of possible HELOC fees:

Discount points: 0% - 5% of the loan amount

Origination fee: $0 - $995

Credit report fee: $68.50 - $137

Flood determination: $5

Owner & encumbrance report: $0 - $115

Settlement fee: $0 - $475

Recording fee: $100 - $300

Appraisal fee: $0 to $1,415 (if required)

Deed preparation: $55 - $110 (if required)

Other title fees: $0 - $3,000 (only on first-lien HELOCs)

Transfer taxes: 0% - 2% of the loan amount (only in certain states)

Estimated survey fee: $1,000 - $4,200 (only in certain states)

Broker fee: 0% - 3% of the loan amount (only for wholesale loans)

As for home equity loans, Better says borrowers can expect to pay $1,500 to $5,500 in closing costs, and the company charges a $995 origination fee.

HELOC vs. home equity loan — How to choose.

Sample home loan interest rates are easy to find for a purchase, refinance, or home equity product. Unfortunately, the fine print reveals that all sample rates are reduced with two discount points or more. Displayed rates are also for borrowers with a minimum 760 credit score and a 20% down payment.

Tweaking those rates to be a little closer to your situation requires clicking the "See personalized rates" button and answering some questions. However, you'll have to provide an email address and sign into an account to get your answer. We stopped there.

How to get the lowest mortgage rate possible.

Yahoo Finance uses 2024 Home Mortgage Disclosure Act data from almost 5,000 mortgage companies to score mortgage lenders on issued mortgage rates and total loan costs. We score each lender on a scale of 1 (lowest) to 5 (highest).

For example, with mortgage rates, a lender with a lower score charged a higher-than-median mortgage interest rate for loans issued in 2024. A higher score would indicate a lender granted lower-than-median home loan interest rates to borrowers in 2024.

With total home loan costs, a lower score would indicate that a lender charged higher-than-median total home loan costs in 2024. A high rating would mean that a mortgage lender offered lower-than-median all-in home loan costs in 2024.

What this means: Better Mortgage offered a near-median mortgage rate of 6.5% and a near-median total loan cost of $5,012.97 to borrowers in 2024.

Better promotes a three-minute preapproval. You jump in with a button that says "Get started," "Start my approval," or something similar, depending which page you’re on. You may also see a call-to-action pop up on the bottom of your screen.

No doubt, you are encouraged to apply.

When you enter the home-buyer application workflow, you'll be greeted with a "Hi, future homeowner!" Before you click through, you're told the process won't impact your credit score. You'll also get details on the One Day Mortgage eligibility, how much home you can afford, and your loan officer's contact information.

The Better web loan application experience is uncluttered, fast, and inviting.

Don't be surprised if you stumble upon some AI in your application process. It's Betsy. A "voice-based loan assistant" being deployed by Better. In a demonstration of how Betsy works, Betsy sounds pretty natural, though there is still a hint of those automated-response voices where you have to scream "representative!" to get to an actual human.

Better's goal is to provide faster service. Betsy can access loan application information and respond to questions with "great detail," the company said in a release.

What documents do you need for mortgage loan preapproval?

Better Mortgage is rich with resources. Some of their tools are noted at the bottom of the home page. Under "Resources," you'll find five calculators and links to home-buying, home-selling, and home inspection articles.

In the menu at the top of the page, you’ll hover over “Buy,” “Refinance,” and “HELOC” to find a learning center option. The learning center will present you with articles, news, and tools, including additional calculators.

A glossary is also available, weirdly placed as a link under the "Contact Us" menu at the bottom of the screen.

When you need to decode a mortgage term or calculate loan scenarios, Better has the resources to help. We give them our highest 5-star rating in our Online Features category.

Better has a good selection of loan options, earning them 4 stars.

Because Better improves its advertised interest rates with two or more discount points, it earns only 1 star for Mortgage Rate Transparency. You can buy points if you want, but baking them into sample rates can fuel unwarranted expectations.

Better offered average mortgage rates and loan costs, according to Yahoo Finance's analysis of 2024 HMDA data. That earns them 3 stars.

Better and Rocket Mortgage were digital mortgage innovators. Now, both are firmly established in the home loan industry.

Rocket Mortgage offers a 1% down payment mortgage program that includes a 2% grant. Better doesn't really promote first-time home buyer programs. Instead, Better promotes quick loan commitments and fast closings.

Rocket Mortgage offers HELOCs but not home equity loans. Better Mortgage offers both, including the unique Bank Statement HELOC.

Shopping for lenders is a matter of matching your needs with a lender's offerings.

Rocket Mortgage review

Better and loanDepot like to bundle real estate services for an enhanced borrower experience. Better offers insurance, title and closing services, and a real estate attorney matching service. Meanwhile, loanDepot focuses on offering real estate agent connections with a cash-back incentive.

HELOCs from loanDepot only involve a soft credit pull, so applying won't affect your credit score. However, loanDepot doesn't offer home equity loans or Bank Statement HELOCs like Better does.

Both Better and loanDepot earn 3-star ratings in our Interest Rates category for offering average mortgage rates. However, according to our analysis of HMDA data, Better has lower overall loan costs than loanDepot.

loanDepot mortgage review

Better Mortgage was founded by CEO Vishal Garg. He holds the majority of shares through the Better Home & Finance Holding Company, and the New York-based company is traded on Nasdaq ($BETR).

Better says that borrowers can generally expect to close a loan within three to six weeks after setting a rate lock. The time spread is due to variables that include how quickly you submit your paperwork and third-party providers' response times.

Better is considered a nonbank mortgage provider, meaning it has no customer deposits to draw on for lending capital. That's not very unusual these days.

Methodology:

Yahoo Finance reviews and scores mortgage lenders with quintile scoring in five primary categories: 1) Interest rates. Using 2024 Home Mortgage Disclosure Act data from almost 5,000 mortgage companies, we score mortgage lenders on issued mortgage rates below or above the annual median of reporting lenders. 2) Affordability. A measure of loan product availability and the willingness of a lender to offer government-backed loans, low down payments, down payment assistance, and consideration of nontraditional credit. 3) Loan costs. HMDA data is again analyzed, and lenders are rated based on total loan costs compared to the annual median. 4) Rate transparency. The ability of a website user to obtain a mortgage interest rate estimate. We score lenders based on whether rates are enhanced with discount points or high credit score requirements, disclaimers revealing rate assumptions, sample advertised rates, and whether adjustable or no discount point rate estimates are available. 5) Online features. An analysis of the educational material, calculators, and additional resources available to users.

Review of Nationwide Multistate Licensing System (NMLS) data on regulatory actions can trigger a penalty to the score of any lender with a consumer mortgage-related administrative or enforcement action within the past five years.

Advertisers or sponsorships do not influence ratings.

Editorial disclosure for mortgages:

The information in this article has not been reviewed or approved by any advertiser. The details on financial products, including interest rates and fees, are accurate as of the publish date. All products or services are presented without warranty. Check the lender's website for the most current information. This site doesn't include all currently available offers.

Laura Grace Tarpley edited this article.

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