Amazon has struck a deal with online mortgage lender Better.com to offer new benefits to employees.
Better.com is launching Equity Unlocker, a program that allows employees to use their equity as collateral when trying to buy a home. Amazon employees in Florida, New York and Washington state will be the first to test the device. What’s unique about the program, according to Better.com, is that employees will have the ability to finance their homes without selling their shares, simply pledging to give up ownership.
According to Better.com, even former Amazon employees can use the service, and there are many following Amazon’s overall corporate downsizing. Current and former employees can use the mortgage tool for second-hand vacation homes or investment properties. Closing costs, when the loan is secured, range from 2% to 5% of the loan, Better said on its website. However, there is a catch. As previously reported by the WSJ: “To protect itself against a continued slide in Amazon’s stock price, Better.com charges higher fees on loans to employees who give stock — between 0.25 and 2.5 percentage points above market value, depending on the situation.” How to set up an advance payment.
Amazon spokesman Brad Glasler told TechCrunch in an email that the company is “always looking for opportunities” to improve benefits and better support employees’ mental, physical and financial well-being.
“As part of that, we offer a wide range of financial benefits, including savings, financial literacy tools and programs to help employees feel better about their finances,” he added. Eligible employees can access these benefits from their first day of employment with us, regardless of role or position.
While this new service from Better is specifically focused on the home buying process, the philosophy behind the program is to provide support for the “whole workforce,” the company says.
“Financial well-being, mental health and physical well-being are all important aspects of employee health, and they all influence each other,” Glasser said. “For financial security, that means short and long-term financial success, providing benefits to employees while at Amazon and beyond.”
It is a creative, but also surprising, partnership. Better has been a customer of Amazon’s web services since 2015, and its credit sourcing system is fully powered by the software, according to a statement. Still, he has gone through his fair share of struggles that have put him in doubt about a better future. Last May, TechCrunch reported that Better.com was on track to lose more than $300 million in 2021, after a rapid-fire run of business driven by a slowing housing market and rising mortgage interest rates. Rates.
The company’s name has gained notoriety following several rounds of mass layoffs, which have also led to executive exodus. Better.com made headlines last July when, despite a lackluster debut performance from a blank check combination, it still appears to be moving forward with its SPAC filing. (On the same day as the updated SPAC filing, the WSJ reported that the SEC was investigating Better.com’s alleged violation of federal securities laws, a disclosure from the company.)
While Amazon may be the experimental guinea pig, Better plans to make Equity Unlocker available to employees of public and private companies nationwide.
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