I recently refinanced my home with a loan from Better.com and I share the details of this experience here
[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 have been thinking about refinancing my mortgage for some time. While I already had a low rate, this year had seen historically low mortgage rates. So, one day in May, I did a bit of mortgage shopping when I read that interest rates were down 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 some research I made up my mind Better. They had the best rates, were super responsive, and had a sleek online portal.
I decided to carefully write down my experience with the intention of sharing it with the fintech community. I locked in a rate of 2.625% on a 30 year fixed loan, a rate that I considered fantastic. It could have been even lower but I decided not to contribute any money at the close so I did not pay anything for this trade.
Below is the timeline for this transaction. The whole process took about five weeks, but could have been a week quicker if we weren’t out of town on the dates originally suggested for closure.
May 18 – Loan application completed
May 18 – Spoken to the representative and blocked on a rate: 2.625% fixed over 30 years. Price blocked until July 2
May 19 – Completed 28 tasks, uploading PDF files of typical financial information
May 20 – The loan went to underwriting
May 20 – Ordered Assessment
May 21 – Conditional loan approval
May 22 – Assessment completed
May 31 – Evaluation received
June 1-10 – Various requests for documents
June 11 – Full approval
June 23 – Closed at home – took 35 minutes
June 28 – Funds paid to old lender, small discount on my bank account
The heart of the Better.com experience is the to-do list, managed through their online portal. There is always a lot of information to provide when applying for a home loan and Better to manage it well. I could always review previous tasks, see what documents I had already uploaded, and stay on track with my current tasks.
They sent me reminders when my next tasks were ready and gently nudged me if I didn’t answer. PDFs were always great and the times they required a wet signature they would accept my scanned documents. I have probably done almost 100 tasks but my situation is a little more complicated than most because my main source of income is from a business that I own that requires a lot of additional documents.
What was great about better
I loved the tech centric experience that revolved around the portal on their website. I did just about everything on my desktop or laptop where I had easy access to most 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, but they organized it in such a way that it never felt cluttered.
- They were very communicative – I was immediately assigned a “home counselor” and he consulted me regularly. He always answered when I called him.
- They were transparent about the numbers – they kept me updated as the close approached whenever the amounts changed for whatever reason.
- No Fax – I had a friend who recently took out a loan with a bank and was forced to fax some information.
- Speed - the whole process took four weeks and could have been even faster if I had been 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 securities company.
Where better could do better
I have very few complaints to be honest. But there were a few boring parts to the process:
- They really pushed their home insurance product, Better Cover. They sent six emails promoting this is too much for a refinance.
- Some tasks they requested I ignored because I felt it was completely irrelevant. These tasks ended up being removed from my to-do list, so they shouldn’t have been requested in the first place.
- The digital fence is still a long way off – we had to sign dozens of pieces of paper at the fence. After the 100% digital experience of the refinancing process, it was a bit disappointing.
Better to work with a number of different banks that buy their loans, they don’t have them on their own balance sheet. Right now, I’m not sure who ultimately bought my loan, but I’m going to make my first payment to The Money Source, Better’s preferred loan service.
Better is become a public company through a PSPC merger because they were hugely successful 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. There he made it clear that he believed Better would go public in the near future, saying that he believed that your clients’ participation in the success of your business was a good thing.
I think Better has transformed the mortgage financing experience for the better (no pun intended). They made it easier for the user to navigate a very complex transaction and I would definitely use them again.