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How does better.com make money? what is their business model? The site says they charge zero commissions & lender fees - does this just apply to the loan recip

by b1n 4y ago

How does better.com make money? what is their business model? The site says they charge zero commissions & lender fees - does this just apply to the loan recipient? maybe it's just commission from the lenders?

benoliver999 4y ago
Commission from lenders is how fee free brokers work, I gather. I used one once and they were fairly transparent about how it works.
sgerenser 4y ago
Better is a direct lender, not a broker. They make their money from the spread between the rate/points offered to the user and the price they can package and sell the loan for.
- midasuni 4y ago
  Ok so why makes them different from any other company selling loans to consumers? I took out a loan from hitatchi a while back, I’ve just today had about an exciting new rebranding they’ve had changing they’re name and how ecstatic I, as a customer, will be about it Do I care? No. At start I care about monthly payments and how many months it is. Afterwards I care how long is left. If better come out with better rates than any other provider that’s great, but there’s no value add for this type of product, it’s just how much it costs.
  - gravypod 4y ago
    > Ok so why makes them different from any other company selling loans to consumers? They are infinitely more convenient and easy to work with from the user side and vertically integrate the entire process. They have loan agents, real estate agents, lawyers, and inspectors. The agent I spoke with last year was very kind. You can also play around with multiple loan options asynchronously and print out different pre-approval letters for the exact amount the house is listed for (this way you don't give away your buying power). > I took out a loan from hitatchi a while back, I’ve just today had about an exciting new rebranding they’ve had changing they’re name and how ecstatic I, as a customer, will be about it Do I care? No. At start I care about monthly payments and how many months it is. Afterwards I care how long is left. If better come out with better rates than any other provider that’s great, but there’s no value add for this type of product, it’s just how much it costs. There are multiple ways that Better makes the process "better" than just rates. Rates aren't really competitive if you have good credit. Anyone will give you the market rates for a loan. If you have some really special situation you might see -.5 off your rate through some special thing. My company has a -.25 if you get a home loan from a specific bank and deposit your pay checks there. Better reduces the overall closing costs by waiving the real estate brokers free if you use their broker. This can easily be >3k. Saving ~1% of a first time home purchase is worth using them imo.
    - midasuni 4y ago
      US real estate fees seem crazy to me, the entire cost to me for both selling and buying my last house was below 1.5%, including estate agent, conveyancing, mortgage fee and van hire. Had I been a FTB it would have been under 1%.
  - l8nite 4y ago
    This is why I prefer wholesale lenders and the independent mortgage broker channel. Prices are better for me, period.

by b1n 4y ago

benoliver999 4y ago

Commission from lenders is how fee free brokers work, I gather. I used one once and they were fairly transparent about how it works.

sgerenser 4y ago

Better is a direct lender, not a broker. They make their money from the spread between the rate/points offered to the user and the price they can package and sell the loan for.

midasuni 4y ago
Ok so why makes them different from any other company selling loans to consumers? I took out a loan from hitatchi a while back, I’ve just today had about an exciting new rebranding they’ve had changing they’re name and how ecstatic I, as a customer, will be about it Do I care? No. At start I care about monthly payments and how many months it is. Afterwards I care how long is left. If better come out with better rates than any other provider that’s great, but there’s no value add for this type of product, it’s just how much it costs.
- gravypod 4y ago
  > Ok so why makes them different from any other company selling loans to consumers? They are infinitely more convenient and easy to work with from the user side and vertically integrate the entire process. They have loan agents, real estate agents, lawyers, and inspectors. The agent I spoke with last year was very kind. You can also play around with multiple loan options asynchronously and print out different pre-approval letters for the exact amount the house is listed for (this way you don't give away your buying power). > I took out a loan from hitatchi a while back, I’ve just today had about an exciting new rebranding they’ve had changing they’re name and how ecstatic I, as a customer, will be about it Do I care? No. At start I care about monthly payments and how many months it is. Afterwards I care how long is left. If better come out with better rates than any other provider that’s great, but there’s no value add for this type of product, it’s just how much it costs. There are multiple ways that Better makes the process "better" than just rates. Rates aren't really competitive if you have good credit. Anyone will give you the market rates for a loan. If you have some really special situation you might see -.5 off your rate through some special thing. My company has a -.25 if you get a home loan from a specific bank and deposit your pay checks there. Better reduces the overall closing costs by waiving the real estate brokers free if you use their broker. This can easily be >3k. Saving ~1% of a first time home purchase is worth using them imo.
  - midasuni 4y ago
    US real estate fees seem crazy to me, the entire cost to me for both selling and buying my last house was below 1.5%, including estate agent, conveyancing, mortgage fee and van hire. Had I been a FTB it would have been under 1%.
- l8nite 4y ago
  This is why I prefer wholesale lenders and the independent mortgage broker channel. Prices are better for me, period.