Just wanted to share my journey so far. I'm working on a new loan for a purchase of a new construction home that is due to be complete 12/10 (not a refinance/no current mortgage). Luckily, pretty much all the information I learned here applies to purchases, not just refinancing, so that was really helpful in the whole process. Big thanks to this community and this thread in particular for all the helpful information.
When we signed the purchase contract for the house we went ahead and applied for a loan through the builders preferred lender (happens to be the the same "company" as the builder). They had a seemingly enticing deal of $4k in "seller" credits if we went with this lender. Knowing what I knew from reading this thread, I was hesitant that it was really even a deal, but went ahead with the pre-qualification anyway just to have a bargaining chip with other lender(s). Shortly after signing the contract and getting set up with their lender, I went ahead and applied with Better. I did not apply with any other lenders. I had the same experience as everyone else in that the rates being offered out of the gate from Better were not competitive at all. At this point in time I was over 3 months out from closing, so I wasn't in a position to rate lock with either company.
Last week we crossed the 60 day mark for the estimated closing date so I decided to start playing the rate/price matching game with Better so that I could lock my rate. Better recommended locking around 60 days out for a 75 day rate lock in order to give some buffer room on closing. I believe this 75 day lock is not standard from them and is only available under certain circumstances, such as for a new construction loan like I am getting. 45-60 days seems to be the norm. I took a look at the rates being offered on Bankrate, Zillow and SmartAsset (these were the only three sites I could find that would display rates without having to provide any personal information) and made a table calculating the biggest cost difference between what Better was offering on their rate table vs the three websites listed. I believe some other members have explained this in more detail, but this was very helpful as the costs could vary wildly between rates, even rates I was not interested in.
SmartAsset actually ended up having the largest price difference at nearly $4k at 2.75% for 30-yr so I took a screenshot of that and sent it to my LO. This was not the case leading up to rate lock though. I had been tracking the prices from the three websites listed for about a week leading up to rate lock and bankrate was the cheapest the majority of the time with Zillow having better rates every so often. One piece of advice on tracking the rates, I noticed that bankrate updates their rates around 9-10AM CST so on the day you decide to have Better match these rates, you may want to take a screenshot early in the morning and then see if the rates get better or worse once they update and then use whichever is better. Since the date in the screenshot will be the same regardless, Better should match either one. Better wasn't able to completely match SmartAsset's price since the website specifically called out a 45-day rate lock at that price, but they did lower it by about $3k which put it within the same ballpark as Bankrate and Zillows offerings.
With my rate table updated, I locked in at 30yr, 2.875% with $2,163 in credits + $2k AMEX promo. With this latest loan estimate, I went to the local lender, who's initial offer out of the gate was pretty bad. 3% with points and fees. Not really competitive, despite the $4k credits. I sent them Better's LE and they came back with a better offer; 3%, but no points and reduced fees. However, this still wasn't as good as Better. They said that was as low as they could go so I pressed forward with Better. A few days later I get an unprompted email from the local lender with a new offer; same offer as before, including the $4k credit, but at 2.75%! I saved the rate table before locking with Better (I recommend everyone do the same) so I was able to reference the cost of a 2.75% loan with Better. That costs was $348 in points (no credits). Therefore, the A+B+C costs for the local lender was nearly $4500 cheaper than Better (not including the $2k AMEX promo) at 2.75%. I reached back out to Better to see if they could match, but they couldn't. Didn't even offer any additional incentives to try and keep me. Needless to say, I told them that for $4500 I have to go with the other lender.
So I ended up with:
30-yr @ 2.75%
A+B+C = $2,519
Seller credits: -$4000
I, of course, have other fees for sections E-H so I still end up having to pay a few grand in closing costs on top of my down payment, but overall I am happy with the outcome so far. Despite not going with Better, I am glad I began an application with them so that I was able to have a competitive offer to force the local lender down in cost. Their online portal is awesome and their communication and responsiveness was really good. Like some others have mentioned, it might be worth waiting until after you've done all your negotiating to add the AMEX offer. Better did use that as a bargaining chip on one of my back and forth conversations trying to get them to match rates.
Last edited by DMB41
on Wed Oct 20, 2021 1:19 pm, edited 4 times in total.