In general, it can take 20 to 45 days to receive a mortgage commitment letter stating a borrower is preapproved for a mortgage.
Better.com now says it can do it in one day.
On Wednesday, the digital lender launched what it calls the One Day Mortgage, describing it as a “breakthrough innovation in the real estate industry.”
“For the first time ever, Better customers will be able to go online, get pre-approved, lock their rate, and get a mortgage commitment letter from Better, all within 24 hours,” it declared in a news release.
Better said the launch came after conducting a quiet beta test with a small segment of its customers in the second week of January. It has already seen strong interest in the offering, it said, “due to its ability to provide prospective home buyers with a significantly higher degree of certainty and peace of mind, on top of Better’s industry leading low rates.”
According to the company, it has already processed over $50 million in One Day Mortgage commitments, with customers receiving a commitment letter in an average of 12 hours.
Speeding up the process, which includes locking in a mortgage rate, can save customers money in the process, the company said.
“This has been so fast,” said Kirk Tallman, a Better customer. “I don’t do these often, but wow, the process has been wonderful!”
“We spent the first seven years bringing the mortgage industry into the digital era, and executing over $100 billion of fully digital online mortgages,” Vishal Garg, Better founder and CEO, said in the release. “Better’s offerings serve to kickstart the slow, opaque, and costly homeownership process. With One Day Mortgage, Better is revolutionizing the mortgage industry once again by empowering its customers, making it not only cheaper, but also faster and easier to own a home, all in one day.”
Better Chairman Harit Talwar agreed. “For my entire career, a one-day mortgage has served as the holy grail for consumer finance companies to achieve and scale,” he said. “With this launch, Better has developed its breakthrough offering. This milestone will add immense value to the consumer, create a significant strategic moat for Better, and be a near impossible act for competitors to follow.”
Prabhu Narasimhan, a partner at Novator Capital, which is a major Better shareholder, said it is hard to overestimate the importance of the new proram.
“One Day Mortgage unlocks it all,” said Narasimha, who is set to join the company’s board of directors. “It takes away the weeks of uncertainty that permeate the entire real estate transaction. If we can execute mortgage commitments in one day and closings in three days, we can complete entire transactions in less than one week to make the entire process better.”
Better.com said the One Day Mortgages program is available in all 50 states to customers who are salaried employees and who are making a downpayment of at least 3% on a conforming Fannie Mae or Freddie Mac mortgage.
The mortgages are fully underwritten to the investor criteria set forth by Better’s investors, including all applicable criteria for conforming mortgages from Fannie Mae and Freddie Mac. Better.com noted that the commitment letter does not guarantee final underwriting approval for a mortgage.
