Better Mortgage is an online mortgage lender that provides borrowers digital mortgage services for home purchases and refinancing. Founded in 2016 and headquartered in New York, Better offers competitive interest rates along with a streamlined and transparent loan process. This comprehensive guide will explore Better Mortgage’s products, loan criteria, rates, pre-approval process, and pros and cons for borrowers.
Overview of Better Mortgage Services
Better Mortgage provides the following mortgage loan offerings:
- Conventional Loans – Fixed and adjustable rate mortgages from top investors.
- FHA Loans – Low down payment options insured by the Federal Housing Administration.
- VA Loans – 100% financing for veterans and military members.
- Jumbo Loans – For high-balance loan amounts above conforming limits.
- USDA Loans – Rural housing loans with 100% financing and low rates.
- Refinance Loans – Competitive cash-out and rate-and-term refinancing.
As an approved lender for Fannie Mae, Freddie Mac, FHA, VA and USDA programs, Better Mortgage provides lending solutions tailored to a borrower’s specific financial situation and goals.
Mortgage Loan Rates Offered by Better Mortgage
As an online lender, Better Mortgage is able to offer low mortgage rates compared to traditional brick-and-mortar lenders by passing on cost savings to borrowers. Their rates are highly competitive nationwide across loan products.
Factors That Determine Your Rate:
- Credit score and history
- Type of loan selected
- Loan-to-value ratio
- Debt-to-income ratio
- Down payment percentage
- Owner occupancy status
For borrowers with excellent credit profiles, their 30-year fixed mortgage rates can start below 3% for conforming loan amounts. Government-backed FHA and VA loans have rates in the 2% range. Jumbo mortgages have slightly higher rates.
Better Mortgage’s Loan Eligibility and Qualifications
When applying for a mortgage loan with Better, you’ll need to meet these general eligibility standards:
Credit Scores – Minimum scores between 580-620 for government loans, 620-740 for conventional loans. 720+ for best rates.
Down Payment – At least 3% down required on conventional loans. FHA is 3.5%. VA/USDA is 0%.
Debt-to-Income Ratio – Your total monthly debt below 45% of gross monthly income is preferred.
Employment History – 2 years of stable income/employment in the same field. Self-employed may require 4+ years.
Home Appraisal – The property must appraise for at least the purchase price.
Meeting the minimum requirements above is just the first step. The full evaluation also accounts for your complete financial profile.
Step-by-Step Mortgage Pre-Approval Process with Better
Here is the typical pre-approval process when applying with Better Mortgage:
- Submit Your Application – Complete an online application with your personal and financial details.
- Provide Documentation – Supply recent paystubs, tax returns, and bank statements.
- Home Buying Budget – Better will analyze your info and provide a pre-approval letter with loan amount.
- Home Search – With pre-approval done, you can now start viewing homes within your approved price range.
- Make an Offer – Present your Better pre-approval letter with any offers to show sellers you are qualified.
- Processing & Underwriting – Better will verify all documentation and finalize mortgage approval.
- Closing – Once approved, finish the final closing process, paperwork, and take possession of your home!
Getting pre-qualified gives you an estimate, but formal pre-approval should be your goal before negotiating on a home.
5 Common Pre-Approval Questions for Better Mortgage
Q: What credit score is needed to get approved with Better?
A: Minimum scores are around 580 for FHA loans and 620 for conventional loans. 720+ scores get the best interest rates.
Q: How long does Better Mortgage take to process an application?
A: With complete upfront documentation, Better can often process purchase loans within 7-14 days. Refinances are usually faster.
Q: Does Better manually underwrite loans for special cases?
A: Yes, they may manually underwrite mortgages for self-employed or unconventional borrowers.
Q: Can I get pre-approved 24/7 with Better Mortgage?
A: Yes, their online mortgage process allows you to apply and get pre-approved any time of day.
Q: What origination fees and closing costs does Better charge?
A: Application fee is $0. Origination fees from 0.5% to 1% of the loan amount. Third-party fees also apply.
Should You Choose Better Mortgage for Your Loan?
If considering Better Mortgage, weigh factors like:
Loan Products – Review the types of mortgage loans and programs offered to meet your needs.
Interest Rates – Better often has very competitive rates, but always compare quotes.
Closing Timelines – Assess if their average closing times work with your home purchase goals.
Customer Service – Gauge their reputation and reviews for supporting borrowers.
Loan Costs – Compare origination fees, closing costs, and points to other lenders.
Ease of Process – Consider the convenience of their technology-focused online process.
Taking the time to compare multiple lenders will determine if Better is the optimal mortgage provider for your situation.
Summary of Key Points on Better Mortgage Loans
- Better Mortgage provides an extensive range of mortgage loan products for purchases and refinancing.
- As an online lender, they offer very competitive interest rates across loan options.
- Minimum FICO scores from 580 to 720+ required depending on specific loan program.
- Down payments as low as 3% on conventional loans or 0% down on VA/USDA loans.
- Fully online application and documentation process for added convenience.
- Compare Better Mortgage to other top lenders like Quicken Loans, loanDepot, and Fairway when shopping for a mortgage.
With exceptional digital services and great rates, Better Mortgage is worth strong consideration for any borrower looking for a smooth no-hassle mortgage experience.