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Better Offers Vested Equity as Homebuying Collateral for Amazon Employees

Over 70% of millennials, of the 54 million making up the US workforce, have said they can’t afford to purchase a home. With a year full of rate hikes and inflation surges, this number is likely to rise. 

For Amazon employees, however, there may be some hope on the horizon. Today, February 28, 2023, Better announced the launch of their Equity Unlocker, and Amazon employees will be the first to have access. 

The new product is aimed at employees with vested equity, allowing them to pledge it as collateral for a down payment on a new home.

Better CEO & founder Vishal Garg
Vishal Garg, Better CEO & founder

“At Better, our mission is to make homeownership cheaper, faster, and easier for all Americans,” said Better CEO & founder Vishal Garg. “The status quo is broken. The entire process around homeownership is opaque and stressful. For young professionals burdened with student debt and lack of savings, we know how hard it is to buy a home.” 

“This problem is exacerbated when many of the best and fastest growing companies increasingly reward their employees with equity rather than cash. Even though equity is a valuable asset, it is considered ineligible by most banks and financial institutions when calculating the necessary down payment on a home.”

Many Amazon employees already used Better to fund $1 billion of their home financing needs and had voiced their issues with equity compensation. 

Previously, in order to afford a home, the employees would have had to sell their equity or take out a daily mark-to-market margin loan against their Amazon stock. 

However, this is not a problem only experienced by them. According to a study by Schwab, 43% of millennials have exercised or sold equity compensation, which makes up nearly one-third of employee net worth. 

In response to this pain point, Better created the Equity Unlocker.  

The product takes away the need for a mark-to-market loan on the equity. The employee’s Amazon stock is valued at the time of the home appraisal. The rate and term of the loan for the mortgage’s down payment are then locked regardless of movements in the stock market. The whole process is conducted using Better’s online platform. 

Ongoing collaboration with Amazon Web Services

The product is another addition to the ongoing collaboration Better has had with Amazon Web Services (AWS). Since its founding in 2015, the company’s loan origination system, Tinman, has been powered by AWS, leveraging numerous products to support cloud computing, processing capacity, and software needs.

 “Better collaborated with AWS and Amazon leaders to find new ways to engage customers in the home-buying journey,” said Chandan Sharma, Managing Director, Worldwide Business Development, Enterprise, and Industry Verticals at Amazon Web Services. 

“Equity Unlocker was built on AWS to help Better reach more customers and extend their buying power. By building Equity Unlocker on AWS, Better is able to innovate continuously and improve the user experience while continuing to provide best-in-class service to their customers.”

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  • Isabelle Castro Margaroli

    Isabelle is a journalist for Fintech Nexus News and leads the Fintech Coffee Break podcast.

    Isabelle's interest in fintech comes from a yearning to understand society's rapid digitalization and its potential, a topic she has often addressed during her academic pursuits and journalistic career.