Getting a quote for a mortgage, whether it is for your first or refinancing your fifth house is not simple. Forgetting all the paper work and obnoxious phone calls you’ll have to make, you wont even know if you are getting the best quote. Thankfully, Better Mortgage is changing the game. The digital direct mortgage lender is simplifying the process down to just 3-seconds of your time while affording you assurance that you are getting the best rate out there. With nearly $5B in funded loans, their numbers speak for themselves.
Today we sit down with Better’s CEO Vishal Garg to discuss the latest round of funding as well as a candid discussion on his company’s vision to improve the real estate industry.
Who were your investors and how much did you raise?
We raised a Series A round $30 million from, Goldman Sachs, Pine Brook, KCK Group Ltd and IA Ventures.
Tell us about your product or service.
Better Mortgage is a digital direct mortgage lender designed to save the borrower significant time and money while making the process simple and transparent. The Better Mortgage online platform enables borrowers to compare competitive rates across loan products and get approved in minutes rather than weeks. Borrowers also enjoy a high degree of transparency into what’s happening with their loans throughout the process. They’re able to view their loan status, submit documentation, and communicate with their dedicated loan officer online, 24/7. Better’s noncommissioned loan officers allow borrowers to get support when they need it without having to worry about aggressive sales tactics.
What inspired you to start the company?
The mortgage industry is one that has been coasting on outdated technology and salesmanship for a long time. Borrowers looking to make what is probably the largest financial decision of their lives have been forced to jump through various frustrating hoops with countless phone calls to loan officers, repetitive requests for information, and even faxes (it’s 2016!). The inspiration for Better Mortgage stems directly from my personal experience shopping for my first home. I worked with a large bank to get a mortgage, and everything that could have gone wrong did go wrong from hours of unnecessary phone calls with loan officers to weeks of waiting for a preapproval letter. At the time, I was a mortgage-backed securities trader, and I began to dig deeper into what went into creating a mortgage. I discovered a broken process that begged to be improved by modern technology and data services. Better Mortgage was born.
How is it different?
The traditional mortgage application process relies heavily on human processing, piles of paper, and endless phone calls. Better is totally different from any other mortgage lender because we use technology to eliminate all the needless friction. When Better acquired an existing mortgage originator, we took it apart and rebuilt it from the ground up, improving the process at every step. What we’ve created is an entirely digital application process that’s efficient, transparent, and accessible on our borrowers’ schedules.
What market you are targeting and how big is it?
We’re aiming to work with anyone in the market to purchase or refinance their home who meets our qualification criteria. Home finance is a $12 Trillion industry, so there’s a great deal of opportunity to make an impact. In addition, we hope that our digital platform and supportive team allow a wider range of qualified borrowers to take part in the American dream.
What’s your business model?
Better Mortgage is a technologydriven direct mortgage lender focused on automating and simplifying the mortgage origination process.
Why do mortgages fit the ondemand model well?
While we aim for our borrowers to feel the peace of mind that comes with ondemand services, we’ve found a balance between instant gratification and responsible lending. Our Quickrate tool allows anyone to get an interest rate quote in a matter of seconds based on current pricing, personal information, and property information, and our digital preapproval can give qualified applicants a preapproval letter with a more accurate, personalized rate quote in just a few minutes. Our team of underwriters works diligently to verify that our borrowers are financially equipped to take on a longterm loan, and our digital platform allows them to work through this process quickly and without redundancy.
What was the funding process like?
Our funding process was relatively seamless! We have a great, supportive group of investors, and we’re excited to be working with each of them.
What are the biggest challenges that you faced while raising capital?
The biggest challenge we faced came from the complexity of our business model. Unlike most other startups, we needed to acquire an existing lender for regulatory and infrastructural reasons which required our investors to understand the complexities of the mortgage industry.
What factors about your business led your investors to write the check?
Our investors appreciate that we have a healthy respect for the difficulty of innovating in the highly regulated and capitalintensive mortgage space. We’ve built a world that blends technological expertise with consumer lending experience which brought our investors to want to work with us.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Capital or no, it’s important to make sure that your team stays motivated and maintains the passion that brings us all to startups in the first place. Remind your team what your short and longterm goals are, what the roadmap is to achieving them, and how their work contributes to the overall progress. As long as everyone knows what they’re working towards and how their work has an impact on the team as a whole, they’ll continue to work hard, your product will get better, and the money will follow (hopefully!).
Where do you see the company going now over the near term?
We’re continuing to build out our team across customer experience and tech development. We’re also in the process of expanding the number of states where we’re actively lending.
What’s your favorite rooftop bar in NYC to unwind?
The roof of our building in SoHo with Forrest’s amazing mojitos!