Do you ever experience with Costco’s mortgage loan program? If not, then you may read through this Costco mortgage review. Many people may think that Costco is a shopping center just like Wal-Mart that sells merchandise and groceries. Most people are wondering how could a shopping center offer a mortgage loan program to consumers?
However, it is true that Costco does offer such a mortgage loan to consumers. Costco’s financial members are scrutiny in selecting a group of top-notch nationwide mortgage lenders that offering competitive interest rates, excellent service, and low processing fees to their valuable customers.
Costco Mortgage Loans With Reliable Lenders
Since Costco is teamed with reputable mortgage lenders, it is no doubt that the retailing giant can offer its consumers the right mortgage services. If you ever used their mortgage loan services, you will be pleased to deal with them as the fee structure they offer you can be quite fantastic.
One thing that you may be wary of is that you will electronically go through a mortgage broker who is only working with selected lenders. For more detail on this, you can actually look into their website for the FAQ section.
The mortgage broker is going to pair you with a lender offering the mortgage that suits your needs. But it is not required for you to discuss to anyone regarding your specific situation.
Costco Mortgage Loan Scenario
Let’s say if you want to refinance for a 15 year fixed mortgage, you may get quoted for a 3.5% rate with fees around $2800 -3000 by two brokers. And then go to the Costco mortgage that could offer you the same mortgage term, but with a better deal for you which is a 3.75% rate with fees of $1200.
If you get the loan, you will be paying a few dollars extra each month but will benefit from a lower amount of the loan and end up saving you money. Therefore, without for you to talk to anyone personally, you’d have just good to go with the lowest rate.
If you are having doubt of why you need to apply for a mortgage loan from Costco instead of direct go to the legitimate mortgage company? Then you can do a quick check on the fees and rates offered by other mortgage bankers.
You may find out that Costco can offer you a lower rate since they are dealing with their own money and therefore they do not need to pay any fee to any middle man as a broker does.
Research and Compare on the Rate
If you are a Costco member and you are looking into getting a mortgage loan from them, you can do some research by yourself. What you can do is you can first do a rate comparison. If you figure out the rates offered by Costco is rather higher compare to other mortgage lenders, then you may want to apply from the lender instead of Costco.
Else if you find the rate offered by Costco is quite competitive, then you can just submit a loan request and getting a quote accordingly.
From the feedback of some consumers who been applied for Costco’s mortgage loan, most of them are satisfied with the terms and rates that were offered. Some been applied for all 4 mortgage loans that advertised on Costco site but end up only received one offer.
Costco Mortgage Loan For Executive Member
Costco does advertise on its website claiming those Executive Members are going to entitle for a $100 cash card within 4-6 weeks after closure. But most Executive Members are receiving their $100 cash card in within 1-2 weeks’ time.
In case you are an Executive Member and do not receive any cash card, you may try to contact Costco’s Lending Tree. Sometimes this can happen due to the technical aberration that will prevent your mortgage from being properly recorded to trigger the cash card.
Once the problem is sorted out, Costco normally will promise you immediate action. You may expect to receive your cash card very soon once all the issues been cleared.
Even though typically most consumers are having a pleasant experience to deal with Costco, but some may have the feeling as though Costco not really coping well with Lending Tree to set up a good system for issuing cash cards.
If you are having the cash card issue as well, it is encouraging that you also making complain to Costco. Since more consumers complain will accumulate the power to alert Costco for their mortgage flaw and they need to rectify it immediately.
Good Experience with Costco
Many of them who have refinanced their houses with the Costco mortgage were extremely satisfied with the service that they got. They claimed Costco is having a lot of experience and competent bankers who can explain all the things and issues a borrower needs to know upfront prior to them to make the final decision on signing any document.
As a friend of mine said she really appreciate as the Costco banker is willing to explain to her in order for her to understand all the fees and credits that she may overlook.
She just can’t believe that they do answer all the questions that she has without any frustration showed. The best thing is that the banker even calls her back just a few days after the previous meet up and said her mortgage is already in process!
A Closer Look
You may have a membership to Costco and visit one of their local warehouses frequently, but have you heard about their whole Mortgage Services venture?
Costco’s Mortgage Services program was instituted and offered to its customers after it passed its initial year-long testing phase. While jumping into the mortgage business may seem like something that’s out of Costco’s range, the company does have a co-branded credit card under its belt, as well as several types of insurance and loans for such leisurely items as boats and RVs.
With its wholesale chain of international warehouses and its other aforementioned services, why would Costco decide to jump into the world of mortgages? What’s in it for them? Not a whole lot, but it does give them another service to provide to their customers.
To start, let’s explain the setup of the whole operation. It’s worth noting that Costco’s Mortgage Services is the result of a partnership with First Choice Bank, which is a state-chartered bank headquartered in Lawrenceville, New Jersey.
First Choice Bank is relatively new in the banking industry, as it has been in business for just over five years. The bank has less than ten branches, and all of them are located in New Jersey.
Should First Choice Bank’s small size and lack of lengthy history in the industry be a cause for concern? It could be, but their wholly-owned subsidiary dubbed First Choice Loan Services is the entity in charge of providing the loan services which Costco has decided to host.
First Choice Loan Services is a direct lender, and their offices stretch far beyond New Jersey’s state limits. In fact, the lender has loan production offices all across the U.S. in Florida, Maryland, Pennsylvania, Colorado, Arizona, and of course, New Jersey.
Costco does not actually negotiate or provide mortgage loans or lines of credit, nor do they receive any commissions that may come from a loan’s closing or a loan origination fee. That responsibility falls on First Choice’s lap.
Costco does, however, hold the First Choice to strict standards in order to maintain the wholesaler’s solid reputation with its huge customer base. As long as First Choice provides mortgage services that are up to par, they get to reap the benefits of having access to Costco’s loyal customers.
As for the products provided through Costco’s Mortgage Services, you get the standard fare of FHA loans, VA loans, and conventional loans. It’s a bit odd that Costco does not offer jumbo loans, as they have certainly made money off of offering jumbo packages of food and other products over the years.
The program does offer to refinance loans and purchase money mortgages, however. If you are an underwater borrower, you may want to take a look at Costco’s streamline refinances and the HARP 2.0 program. Keep in mind that the program is still quite new, so it could expand to offer more services in the future as more approved lenders join.
For the time being, Costco’s mortgage program has such participants as First Century Bank, New York Loan Exchange, Sterling Bank, United Community Mortgage, and Vanguard Mortgage, among others.
If you have ever seen the Zillow Mortgage Marketplace, Costco’s mortgage program works in a similar manner. You enter your personal data, such as property and loan information, and you receive various mortgage quotes.
Participating lenders will see your information only if you request a rate quote. This offers some degree of anonymity. If you see a quote that you like, you can receive a discount on lender fees since they are capped by Costco.
Being a member has its privileges, and that’s why Costco Executive members pay less than $600 in lender fees, while Goldstar and Business members pay less than $750. Compare these fees to the standard rates of $1,000 to $2,000.
Costco’s Mortgage Services may not be the best around, but the company does offer another option when it comes to shopping. Still, you should definitely investigate other options such as your local bank or online lenders to ensure that you get the best deal possible.
Read also: Know more about Annual Percentage Rates (APR)
Final Words on Costco Mortgage Review
Overall, the rates and fees of Costco mortgage loans tend to be lower if compared to conventional lending companies or banks. If you want to get more information on what you need to pay for the Lender Fees, it is better for you to visit Costco Finance and do a search for a mortgage.
Furthermore, for the Executive Members Lender Fees charged normally won’t be more than $600 for each mortgage loan. And the Lender Fees charged to Business and Gold Star Members won’t be more than $750 for each mortgage loan.
Finally, what you need to bear in mind is that any Third Party Fees aren’t subject to the limits. Hopefully, you will find this Costco mortgage review is useful for you.
There are also many people looking for Chase mortgage loan, you may want to read the Chase mortgage review and figure out what you can get from it.
Read also:
Tried to refinance my investor property through Bank of Internet via Costco. They are very unorganized with the information they requested from me for the loan. There were more than one person asking for the same information. The agent accused me of not saying the property was in trust, which I did, so now it will cost extra to switch finance institutions that does trusts. You also have to take in consideration the time difference in getting information and responses. Be ready to do most of the work for them. It takes awhile inbetween responses because the agent is only the middle person who is asking for the underwriter. They will ask what they need and you have to fax, email, or mail.
Information asked for by the agent is sent via email and is not very clear as to what the information is for so that I am getting the right information for them. They do not respond if they got the information or they have a question about it until days later. According to BOI, my property did not meet “Fanny Mae’s requirements”.
There is a loophole where the Management company of my property is not required to monitor the occupany percentage of the condo units but Fanny Mae will not approve without it. So I lost out on paying for the report and lost the prepayment cost to Costco. I was also told I will not be able to refinance with any bank without this requirement. I was told no one will refinance my loan because of the insufficient report from the Property management company.
If they only lead with that information first and (even when I told the agent my property was in trust) make sure the mortgage company they select to handle my loan works with trusts before having the customer waste their time and money, then I could have avoided all the other payments. This could be their lack of knowledge in refinancjng investment properties which is what, I as a customer, was trusting Costco to provide when I went through them for refinancing my mortgage. Never again and will tell others not to use Costco too.
I just think that this is one of the best article being written about Costco mortgage. I always admire the way Costco doing business.
Need to better undertand Cotsco refinance program
DO NOT REFINANCE THROUGH COSTCO!
you will end up dealing with metlife that will take every possible dollar from you, and mess with your payments endlessly!!! I regret going this direction!
I just closed my 500k loan with them. They were awesome. The interest rate was lowest and origination fee was the lowest ($500). You cannot beat it plus Costco will back it’s members. They forgot to lock my rate so I called and got Costco to force them to lock it.
Hi.
I want to discuss to a representative about refinance and mortgage reduction program.
Thanks
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