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Better Mortgage was recently named one of the top online mortgage lenders by NextAdvisor because it offers unique incentives for borrowers and a streamlined online platform where borrowers can get a mortgage pre-approval letter in just a few minutes. minutes. Some drawbacks are that this lender is not available in all states and does not have some major mortgage options. Here’s what to know before you apply with Better Mortgage.
Advantages and disadvantages of a better mortgage
No origination fees
Quick mortgage prequalification letter
Borrowers get $ 100 if Better can’t match or beat another lender’s loan estimate
Offers incentives of up to $ 2,000 if applicants use a Better Real Estate real estate agent and mortgage lender
Customers receive $ 2,000 if Better does not close their purchase loan on time
Not available in Hawaii, Massachusetts, Nevada and New Hampshire
Does not offer VA loans, USDA loans, second mortgages and other niche products
No in-person branches
Best mortgage: loan types and products
Better Mortgage offers several loan options suitable for homebuyers looking to make a purchase or for homeowners looking to refinance an existing mortgage. Here are the specific types of loans on the menu with Better Mortgage right now:
Borrowers will have to look elsewhere if they are looking for more specialized products such as construction loans, home improvement loans, home equity lines of credit, and mortgages guaranteed by the United States Department of Agriculture (USDA loans ) or the Department of Veterans Affairs (VA loans). Better also does not provide mortgages for manufactured homes, multi-family homes with five or more units, co-ops, and mixed-use properties.
But if you are able to find a home loan that matches your needs, you may be eligible for one of the lender’s customer incentives. Borrowers are eligible for loan credits of up to $ 2,000 if they use a Better Real Estate real estate agent and mortgage lender. According to his Price Guarantee, Better will also match any valid competitor’s offer and credit you an additional $ 100 if you find a better offer. In addition, in a relatively new development, Better now guarantees that the purchase loans will close on time – and if they don’t close on time, Better will pay the customer $ 2,000. These incentives could be attractive if you are considering your options.
Borrowers also have the choice of fixed rate and variable rate (ARM) mortgages on conventional and jumbo mortgages. When you take out an ARM with Better Mortgage, the rate is fixed for the first five, seven, or 10 years. After the end of the fixed period, the rate may increase or decrease every six months or a year, depending on the terms of the loan.
Qualified homebuyers looking to borrow a large sum of money can take out a loan of up to $ 4 million, which is a higher maximum loan limit than some of the lender’s competitors.
Better mortgage transparency
The Better Mortgage website is easy to navigate and offers a completely online experience, from finding an agent to getting a mortgage to purchasing insurance. Potential borrowers can also request and receive a personalized quote and pre-approval letter within minutes. If borrowers have questions or need help, loan officers are available by phone, although Better does not maintain branches in person like some of its competitors do, so talking face to face is not. an option.
The website also includes a blog with topics on buying a home, an FAQ page, and calculators to help borrowers determine how much home they can afford. It lacks detailed information on the minimum credit score and debt-to-income ratio requirements for its loans, likely because the requirements vary widely by borrower, location, and current market.
Best mortgage: rates and fees
Better Mortgage announces refinance and purchase rates for 15, 20 and 30 year loans. These rates may change daily and may include points of call, which are optional fees that you can pay to reduce your rate. Unlike other lenders, Better Mortgage does not charge an origination fee.
To qualify for a mortgage, you will need a credit score of at least 620 for compliant loans (including conventional mortgages and FHA loans) and 700 for jumbo loans. However, a higher score can help you get even better mortgage rates.
You can lock in your interest rate online at any time, for a fee, and extend the rate lockout for an additional fee. Borrowers will not pay set-up fees, application fees, processing fees, underwriting fees or prepayment penalties. But they will probably pay out of pocket:
- Assessment fees
- Title search and title insurance
- Registration fees
- Escrow deposit
- Prepaid interest
- Optional mortgage points
Refinancing with a better mortgage
Homeowners with existing mortgages looking to refinance can swap their home loans to better meet their financial needs.
One refinancing option offered by Better Mortgage is cash refinancing. This type of refinancing allows you to take out a mortgage that is more than you owe, pay off your current mortgage, and keep the extra money. You then pay off the new, larger loan over time and can use the money for any type of expense.
But if you’re just looking to save money or speed up your repayment schedule, rate and term refinancing can help you achieve that. You would work with your Better Mortgage lender to change your interest rate, your loan term, or both.
Better offers several rate and term options, including RefiNow from Fannie Mae and RefiPossible from Freddie Mac. These programs are designed to help low-income homeowners across the United States are refinancing their mortgages. Eligible homeowners could save around $ 100 to $ 250 per month, according to at the Federal Housing Finance Agency.
Best mortgage compared to other mortgage lenders
|Best mortgage||Fairway Independent Mortgage Corp.||Guild Mortgage|
|Minimum credit score||620 for compliant loans, 700 for jumbo loans||620 for conventional loans, 660 for jumbo loans, 600 for FHA loans, 600 for VA loans||620 for conventional loans, 600 for FHA, VA and USDA loans, 680 for jumbo loans|
|Minimum deposit||3%||0% to 5%||0% to 3.5% on most loans and 15% on jumbo loans|
|Where does the lender operate?||46 states and Washington, DC||All 50 states and Washington, DC||48 states and Washington, DC|
|Main types of loans||Conventional, jumbo, FHA, adjustable rate, fixed rate, refinancing, cash-out refinancing||Conventional, Jumbo, VA, FHA, USDA, Various Home Improvement Loans, Variable Rate, Fixed Rate, Refinance, Refinance With Withdrawal, Reverse Mortgages, Home Equity Loans, Home Equity Lines of Credit||Conventional, Jumbo, VA, FHA, USDA, Various Home Improvement Loans, Variable Rate, Fixed Rate, Refinance, Cash Refinance, Energy Efficient Mortgages, Manufactured Home Loans, Bridge Loans, Reverse Mortgages|
How To Shop For The Best Mortgage Rate
Mortgage rates are always on the move. They can change daily and even by the hour, and they vary with each lender. So, when looking for the best deal, it’s important to shop around and see what everyone is up to.
You can use a online mortgage calculator to estimate your mortgage payment when you factor in principal and interest, property taxes, home insurance, private mortgage insurance, and homeowners association fees. It can also help you calculate how a small rate difference can save you hundreds or thousands of dollars over the life of the loan.
Start by comparing mortgage lenders, submitting mortgage applications, and requesting a loan estimate with at least five lenders. According to a Freddie Mac investigation, borrowers save an average of $ 3,000 over the life of the loan when they collect at least five quotes. You could also save even more by negotiating. You can send the best offer to another lender and ask them to beat the interest rate or lower the closing costs, or both. They can be prepared to compete for your business, especially if you have good credit.
A better mortgage might be a good option for you if you are looking for a standard mortgage and qualify for some of the lender’s money-saving incentives. If you choose Better as your lender, you will be able to get a prequalification letter online in minutes, which can help you start the home shopping process. But as with any financial product, it’s always a good idea to shop around to make sure you’re getting the best deal.