[Editor’s Note: This article shares my own personal experience in refinancing my home. Better had no idea who I was or that I would be writing about this experience.]
I had been thinking about refinancing my mortgage for some time. While I had a low rate already, this year had seen historically low mortgage rates. So, one day in May I did a little mortgage shopping when I read that interest rates were dropping and close to their all time lows. My current mortgage, obtained in 2016, was with one of the big four banks and going through the process was a complete nightmare. So, this time I decided to only consider fintech companies. After a little research I settled on Better. They had the best rates, were super responsive and had a slick online portal.
I decided to take careful notes of my experience with the intention of sharing it with the fintech community. I locked in a rate of 2.625% for a 30-year fixed loan, a rate I considered to be fantastic. It could have been even lower but I decided not to bring money to closing so I was not out of pocket anything for this transaction.
Below is the timeline for this transaction. The whole process took about five weeks but could have been a week quicker if we were not out of town on the dates they initially suggested to close.
May 18 – Filled out loan application
May 18 – Talked to the rep and locked in a rate: 2.625% 30-year fixed. Rate locked until July 2
May 19 – Completed 28 tasks, uploading PDFs of the typical financial information
May 20 – Loan went to underwriting
May 20 – Appraisal ordered
May 21 – Conditionally approved for the loan
May 22 – Appraisal conducted
May 31 – Appraisal received
June 1-10 – Various requests for documents
June 11 – Full approval
June 23 – Closing done at our home – took 35 minutes
June 28 – Funds disbursed to old lender, small rebate to my bank account
The core of the Better.com experience is the Task list, managed through their online portal. There is always a lot of information to provide when doing a mortgage application and Better managed this well. I could always review previous tasks, see what documents I had already uploaded and keep on track with my current tasks.
They sent reminders when my next tasks were ready and gently nudged me if I was unresponsive. PDFs were always fine and the times they required a wet signature they accepted my scanned documents. I probably performed close to 100 tasks but my situation is a little more complicated than most because my main source of income is from a company I own which requires a huge number of extra documents.
What Was Great About Better
I loved the tech-centric experience that revolved around the portal on their website. I did pretty much everything on my desktop or laptop where I had easy access to most of the documents. Here are what I consider to be the positives:
The interest rate was the cheapest I found.
The online portal was great – all my tasks were kept in one place, yet they organized it in such a way that it never felt cluttered.
They were very communicative – I was assigned a “Home Advisor” right away and he checked in with me regularly. He always answered when I called him.
They were transparent on the numbers – they kept me updated as we approached closing whenever the amounts changed for whatever reason.
No faxes – I had a friend who closed on their loan with a bank recently and was made to send some information via fax.
Speed – the whole process took four weeks and could have been even quicker if I was more responsive to their requests.
Closing at my home – their mobile closing service was so convenient. I loved not having to sit in a conference room at a title company.
Where Better Could Do Better
I have very few complaints to be honest. But there were a few annoying parts to the process:
They really pushed their home insurance product, Better Cover. They sent six emails promoting this, that is too much for a refinance.
Some tasks they asked for I ignored because I felt it was completely irrelevant. These tasks ended up dropping off my task list so they should not have been asked for in the first place.
The digital closing is still a ways off – we had to sign dozens of pieces of paper at closing. After the 100% digital experience of the refinancing process it was a bit of a let down.
Better works with a number of different banks who purchase their loans, they don’t hold them on their own balance sheet. As of now, I do not know who has ultimately purchased my loan but I will be making my first payment to The Money Source, Better’s preferred loan servicer.
Better is in the process of becoming a public company via a SPAC merger as they have enjoyed tremendous success during the real estate boom of the last 18 months. I interviewed CEO Vishal Garg on my podcast a year ago as they were really starting to ramp up. He gave a clear indication there that he believed that Better would become a public company in the near future, saying that he believed having your customers participate in your company’s success is a good thing.
I think Better has transformed the mortgage finance experience for the better (no pun intended). They have made a highly complex transaction simple for the user to navigate and I would use them again in a heartbeat.
Peter Renton is the chairman and co-founder of Fintech Nexus, the world’s largest digital media company focused on fintech. Peter has been writing about fintech since 2010 and he is the author and creator of the Fintech One-on-One Podcast, the first and longest-running fintech interview series.