- Digital mortgage lending company Better launched a new product, One Day Mortgage, that offers borrowers a mortgage commitment letter within 24 hours of applying for a loan.
- During a period of beta testing, Better reported that it processed over $50 million in commitments, offering commitment letters in an average of 12 hours.
- To qualify for the One Day Mortgage, borrowers must be salaried, make a down payment of at least 3%, and upload required documents within four hours.
Digital mortgage lending company Better launched One Day Mortgage, a new tool that does what it says– it enables borrowers to get a mortgage in a single day.
Using One Day Mortgage, home loan borrowers can get pre-approved, lock-in their rate, and receive a mortgage commitment letter, all within 24 hours. This timeframe is weeks faster than the industry average of more than 30 days.
Today’s announcement comes a couple of weeks after Better first launched the service in beta to a small group of customers. Since then, Better has processed over $50 million in commitments from its One Day Mortgage product. What’s more, it has helped customers receive a commitment letter in an average of 12 hours.
The One Day Mortgages are available to borrowers working in a salaried job and making a downpayment of at least 3% on a Fannie Mae or Freddie Mac mortgage. To further qualify, applicants must provide requested documents– including pay stubs, W2s, bank statements, and more– within four hours of locking in their rate.
Better’s One Day Mortgage product is a fairly large step forward for the mortgage industry, which has not seen much innovation in the past decade, despite the onslaught of new enabling technologies. The fast turnaround is made possible by Better’s digital-first approach that takes place completely online. This model enhances the user experience by offering a fully digital document upload and tracking tool.
“One Day Mortgage unlocks it all,” said Better shareholder and Partner at Novator Capital Prabhu Narasimhan. “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.”
Offering customers a mortgage commitment letter within 24 hours is certainly a competitive advantage for Better. As company chairman Harit Talwar explained, “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.” And he’s most likely right– for the time being. We probably won’t see other mortgage lenders offering 24-hour mortgage loans any time soon, but it’s quite possible the new offering will be industry standard by the end of the decade.
Founded in 2016, Better has seen its share of hardships in the past year. Last year, Better conducted its fourth round of layoffs in less than nine months, letting go of almost 4,000 employees during that time. What’s more, the company’s CEO Vishal Garg made headlines numerous times last year for his contributions to what employees described as a toxic work environment.