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Saturday, June 25th
Better is not your average home loan provider - and that's a good thing. Started in 2014, this company is able to fund mortgages 100% online, without a single phone call (though you'll still have to attend closing in person). Of course, if you want to talk to someone, no problem: Better has support representatives and loan experts available around the clock if you've got a question about your application or want a status update on your home loan. At the time of this review, Better offered home loans everywhere except Nevada, where they hope to add to their services soon.
See rates with no personal info required
We've always appreciated how transparent Better is with their rates and fees. On their main page, it's easy to personalize today's local rates by clicking on the big green button. Just put in your zip code and watch the rate chart shift. Or add details like your credit score range, property type, and preferred mortgage type and get even more specific - all without having to disclose your identity. We love it. But, if you want to check rates more than one or two times, Better will prompt you to enter your email address for unlimited (and free) rate quotes. Or, get even more specific and personalize your rate quote. You'll be asked for more personal data, like what stage of the buying process you're in, your anticipated timeframe and so forth.
Make a cash offer...
Let's pause for a second to talk about one question you might not understand as you're getting to your custom rate quote. In some real estate markets, it's almost impossible to be the winning bidder without a cash offer. So what can you do if you don't have that much on hand? Use Better to make the cash offer for you. Yes, you read that correctly. You'll apply for your mortgage first, securing the approval and going through underwriting to determine your budget. You'll then work with a Better real estate agent to help you find the right home and make the offer.
...with no service fees!
When you have an accepted offer, you'll pay a security deposit of 5% of the purchase price as earnest money, which will be applied towards your down payment at closing. And, you'll pay prorated daily rent from the time between the cash offer closing and the closing on your Better mortgage (which will be 30 days or less). But, beyond that, there are zero administrative fees for using this service. Just be aware that this cash offer program isn't available in all 50 states - yet.
Watch for glitches
If you click "yes" on the cash offer program during the personalization process, your rate quote process stops and you'll be asked to provide your name and phone number to continue. At this stage, we actually encountered a glitch where the "click to confirm you're not a robot" security feature stopped working, and then we got an error saying "account creation blocked" . Oops! If that happens to you, just reach out via Better's toll-free number to get it taken care of.
Verify identity for quotes
Otherwise, you'll indicate if you already have a real estate agent and THEN you'll be asked to create an account. We didn't have any problems at this step of the process. Just be aware that you'll have to verify your email address before you can see your account, so no fake email addresses if you want to see your loan quotes. Next, you'll enter enough information for Better to verify your credit report through a soft pull, like the last four digits of your SSN and your mobile phone number.
Answer a few further questions
If Better determines that you'll qualify for a loan (should you choose to take that step), you'll also be asked to indicate if you want your taxes and insurance to be held in escrow or if you're going to pay them directly: your choice may be impacted by your state/local laws in that regard. Whatever you indicate, it's not a final commitment; it's just used for the purpose of showing you what your monthly payments will be. You'll also see an estimated closing date.
Extremely transparent with available loan choices
Once you get your Better rate quotes, you're going to be impressed. You'll see every possible combination of rates, points and terms that Better offers, primarily focusing on 15-, 20-, and 30-year fixed mortgages (which is what 98% of home buyers choose). Make sure to tell your Better rep if you're looking for a different loan type, so that he or she can give you options for ARMs, FHA loans, and so forth.
Choose a loan you like
If you find a loan in your rates that sounds appealing, select it to add it to your Loan Estimate page. It's not a lock or a commitment, just a placeholder of sorts. It will then show up in the links on the left side of the dashboard. You'll also see a to-do list that you'll tackle if and when you decide to formally apply for a mortgage through Better, like documents that need to be uploaded to confirm your income or assets.
Phone help available if needed
Don't be afraid that applying for a mortgage online will leave you without help. As a matter of fact, we got a phone call after we entered our initial information, to see if we had any questions about the Better process. We were glad that the loan specialist was friendly and well-informed, but also that she didn't place any pressure on us to lock in a rate. There's also no worry about unsolicited emails and phone calls with Better: you can specify your contact preferences in your profile and opt to just get communications via whichever channel you prefer.
Don't worry about the BBB
You might be wondering why Better earns our first-place ranking, despite a "B" rating from the Better Business Bureau. The numbers tell the story: the BBB says that Better earned that grade for having 225 complaints filed against it over the last three years. But, when you look at our second- and third-place winners, those lenders have 911 and 1152, respectively. You can see why we're not letting our opinion of this mortgage lender be overly swayed by that "B" from the BBB.
Better keeps borrowers happy
Plus, when you look at the thousands of five-star reviews left by super-satisfied Better clients, that "B" starts to fade even more quickly. Across the board, Better clients describe the experience as smooth, transparent, and much faster than expected - for first-time buyers and experienced homeowners alike.
Obvious choice for home loans
That definitely lines up with our experience. Every step of the Better home loan process was easy to understand, very transparent, and best of all, gave us the best rates and terms we found anywhere. When you consider the extra bonus of being able to use a Better mortgage to make a cash offer in competitive real estate markets - for absolutely zero fees - it's obvious why Better earns our first-place ranking for home loans. Make this lender your first stop when searching for your home mortgage.
Your first thought might be to visit your local bank or broker, but think again. Why? You're not likely to get the very best rates and terms there. True, you might get a promo or slightly lower interest rate for being a current customer, but will your financial institution shop around to find you the ideal loan for your situation?
More than likely, they'll fit you with whichever mortgage is convenient (or profitable) instead of working to get you a home loan with the best possible terms. With interest rates constantly fluctuating, it's never a bad time to start looking into your financing options if homeownership is your goal. Even if you're just curious to see how much you can ultimately afford when the time comes, that will help you start budgeting and saving to have enough to secure your new home when you're ready.
Some mortgage terms stipulate that the funds can't come from a last-minute gift or contribution from a well-meaning family member, so plan ahead!
The easiest way to know how much you can borrow is by shopping for a home loan online. While some lenders require you to enter your personal information to show you their rates, others post sample rates online or let you choose your credit score range and other details to preview a more personalized quote. Be mindful that there's a difference between a "soft pull" on your credit - usually used to prequalify you, and only uses your address and phone number to verify your identity - and a "hard pull" that will impact your credit history.
The latter usually happens only when you've got a home under contract and you're ready to secure a mortgage, but pay attention to the fine print when you're checking out a lender's rates. You don't want to be "just browsing" and find out that your credit score took a nosedive with an unintentional hard inquiry on your report!
With many lenders interested in your business, how can you decide which one to use for your mortgage? Here are a few factors to look at before you complete a loan application:
To help you finance the home of your dreams, TopConsumerReviews.com has evaluated and ranked today's most popular mortgage lenders. We're confident that this information will be useful on your journey to home ownership. Congratulations!
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