UPDATE: We are appalled at the Better.com CEO’s recent behavior. Everyone we worked with at that company was helpful, and we chose Better partly because of their customer service. It’s a shame they treated their employees like this. I debated removing this post, but I decided to keep it to share our decision factors. I can say we would not choose Better the next time we refinance rental mortgages.
In Dec 2020/Jan 2021, mortgage rates hit an all-time low. We knew we needed to refinance our Bremerton property to get our VA loan back, and the time to do it was now. With rates this low, we considered refinancing all three rental mortgages. And the time to act was now, as rates started creeping back up in February.
We waited for the following reasons:
- We’ve had quite a bit of construction in Bremerton, and we needed to rent most of the units and have the construction in the third unit near completion before doing an appraisal.
- After my husband’s illness in 2020, we had used our emergency fund and accumulated some debt, so I wanted to replenish those funds and pay that off before a refi.
- Tackling a refi is a lot of work, and I needed to wait until I had a lull in my work schedule.
Since we earn rental income on all our properties, my primary goal with the refi was to lower our payments/increase cash flow, while keeping our costs to refi low. We were not concerned by mortgage duration. Refinancing our 2017 Bremerton mortgage into a new 30-year loan could save us $200; after doing that math, I added our other to mortgages and realized we could increase our cash flow by $1000 per month. That is significant, so I decided to refinance all rental mortgages.
| Property | Current | New rate |
| Bremerton | 30-year, financed 2017, 3.875% | 3.375% for 30-year, save ~$200/momth |
| West Seattle | 30-year, financed 2015, 4% | 3.25% for 30-year, save ~$400/month |
| CD | 30-year, refinanced in 2017, 4.25% | 3.125% for 30-year, save $400/month |
There are 2 reasons these rates are higher than a typical refi rate: 1. the properties are investments/rentals, which always tend to be higher and 2. Bremerton and CD are both zoned multi-family, which increases rates. CD is only slightly lower because it also happens to be our primary.
How we picked our refinance partner
I use the term refi partner rather than lender, because I am well aware (but not thrilled) that our mortgages will be sold. That was always our experience when financing or refinancing in the past. We went with a broker rather than a bank so we could get the lowest rate – refinance rates at our bank were quoted much higher.
We used an in-person broker for our last purchases, but he had since retired, so we were starting over. Having an agent is always helpful when purchasing a new property because they can help you navigate issues that pop up in financing. But this was a refi… we already knew everything about the properties. I elected to go with an online brokerage to reduce costs and speed up estimates. There were four I evaluated; the comments below reflect my experience, and yours may be completely different.
- Sofi: I refinanced a student loan through Sofi, so they already had all my information. After getting pre-approved, I quickly ruled them out as their rates were much higher
- Better.com: I found Better via a list of recommendations on Nerdwallet.
- Quicken Loans/Rocket Mortgage: Quicken was also in the Nerdwallet list, and a friend also recommended it from a recent refi.
- Zillow Home Loans: Unlike the three above, Zillow also services the mortgage. That was a plus for me, as I knew what I was going to get.
After getting all my rates, I moved forward with Better.com
Decision factors
Better.com stood out for me because the experience was entirely online – at no point did I have to talk to anyone to move the process along. I could enter all my information, and receive a clear list of options with associated costs. Below are other factors that helped me make my decision:
- Information transparency: As mentioned above, it was very clear what my options were with Better. Neither Zillow nor Quicken sent a breakdown of rates and costs at all – everything was over the phone. And Quicken refused to do a quote for me until the day that I was ready to get a loan; I had to block out hours to speak with someone and gave me little time to compare quotes.
- Customer service: I did speak to a few Better loan specialists along the way, but only to address any questions I had throughout the process. I never felt like they were selling me. The gentleman at Zillow was helpful as well, but it was hard to get all the costs. The customer service at Quicken was terrible – in my first conversation, the agent told me repeatedly that it was a “no brainer” to go with them. Excuse me, but I’m refinancing a significant amount of debt… I’m going to use my brain on this one.
- Rates: Better also had the best rates for the lowest costs, which I could clearly see because they were so transparent. Zillow or Quicken may have provided a slightly lower rate, but they would often quote the very best rate without mention of the cost of the points associated with that rate.
Experience
This experience was sooo much easier than any refinance we’ve done in the past. Any time I had a new task, I had a ping from Better. It was fairly quick too – our first refinance closed in 30 days and the rest followed soon after.
If you are considering Better, they do have some discounts available, but you have to look. There is a referral discount if you know someone who has refinanced with them, and there are other discounts available online if you search. If you are comparing rates, it’s likely they will give you a discount to go with them. We had a great experience, and I would consider using them for our next purchase.
