A Mortgage From Costco – What to Expect

May 18, 2013 1 Comment »
A Mortgage From Costco – What to Expect

Millions of people from one side of the country to the next do their shopping at Costco. They love the bulk, low prices, customer service, and great discounts. All in all, the experience is enjoyable and it allows people to save a lot of money on everyday necessities.

With all that being said, would you ever consider applying for a mortgage through Costco? It is one thing to buy your meat at this warehouse, but another thing entirely to trust them with your home loan.

Here is what you need to know: Costco has partnered with First Choice Loan Services, a division of First Choice Bank, to provide home loans to their members who happen to be in the market. In other words, you are not dealing directly with Costco when you apply for a loan. Instead, you are going through its lending partner.

Costco currently offers three types of loans:

  • Traditional mortgage
  • Refinance
  • Veteran loan

While most people opt for a traditional mortgage, there are many who are staying put in their current home but looking forward to taking advantage of a lower rate through refinancing. And of course, those who have served the United States have the ability to apply for a VA loan.

Find the Best Deal

Although we hate to use the word “broker,” this is pretty much what Costco is during the process.

You will start out by completing a basic application on the Costco website. From there, however, you will be connected to many of the “finest lenders” in the United States, all of which have signed on with Costco to provide members with fast response times, top of the line service, and of course, superior pricing.

So remember, Costco is not actually funding your loan they are simply matching you with their “preferred lenders.” Although First Choice Bank does the majority of the loans, you may be connected with another partner bank. Costco has many larger online deposit based banks as their partners (see the list below for more).

Because Costco is essentially helping you shop for your loan, you’ll get a number of rate quotes from their partners after submitting all of the required information. You wont, however, be able to see which institution is offering which rate until you’ve locked in.

Costco’s Loan Partners:

- WestStar Mortgage Inc.

- Sterling Bank

- CapWest Mortgage

- Bank of Internet

- United Community Mortgage

- Wyndham Capital Mortgage

- Vanguard Mortgage

- Real Estate Mortgage Network

-First Century Bank

Here are what we’ve found to be some of the biggest advantages of using Costco to help you secure your loan.

1) As we mentioned before, Costco’s partnered institutions are heavily vetted for speedy service and a highly responsive customers service department. Anyone who’s ever gone through the home loan process can attest to how valuable those elements are when securing a loan, especially when closing dead lines are tight.

2) Price. As with everything else Costco, be it gas, insurance or peanut butter, you’re bound to find competitive pricing. Similarly lending fees are extremely reasonable when compared to other products on the market.

Lender Fees:

  • Executive Members: lender fees of $600 or less
  • GoldStar Members: lender fees of $750 or less
  • Costco Members: savings up to $5,000 over the typical life of the loan

If you still have questions or concerns, you can visit the Costco website for testimonials and/or fill out the application.

There is no denying that Costco can help members save thousands of dollars per year. But can you trust them with your mortgage? In most situations, it appears that the answer is yes.

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  • rodolfo camacho

    I applied for refinance and qualified for 3.75% and $290
    closing fee as Executive member. There
    were other typical fees such as appraisal and escrow fees.

    I was assigned to Weststar Mortgage, Inc. My initial contact
    was with Ty Nuottila. He was very smooth, promises the world and then hand you
    off to some minion to shuffle the paperwork.
    In my case it was Shane Shockley.

    As it turned out Ty Nuottila is the type of person that if
    you shake his hand, you better count your fingers afterward.

    The Costco funnel to this well orchestrated “den of
    thieves” began to unfold as the loan mysteriously took longer than
    expected. Therefore your rate lock
    expires. They give you every conceivable reason for the delay. It sounded like an old “Saturday Night Live” show.

    When the final paperwork arrived it was at 4% and close to
    $1,000 in points to receive a lower mortgage interest rate. Nothing was ever
    said about the interest rate going up and the new buy down fees.

    This is classic “Bait and Switch”. Here the mortgage lender has breached its
    fiduciary obligation to me. The mortgage company has a fiduciary duty that
    includes a requirement that the mortgage broker place my economic interests
    ahead of his own economic interest.

    You can be assured that I will be filing complaints with state
    regulatory agencies alleging misrepresentation of mortgage product, unfair
    business practices and many more consumer causes of action.

    I am also filing complaints with the ALL federal agencies
    that oversee mortgage brokers, lenders
    and banks.

    STAY AS FAR AWAY FROM THESE VULTURES AS YOU CAN. THEY GOT ME FOR THE APPRAISAL FEE AND I WILL
    NOT PLAY INTO THEIR SCHEME OR ARTIFICE TO HOOK ME FOR A HIGHER RATE AND PAY
    ADDITIONAL FEES.

    This may be an appropriate case alleging Civil RICO violations.
    (RICO) “Racketeer Influenced and Corrupt Organizations Act”

    A word to Costco, take a hard look at the slime that is
    representing you.

    Rudy Camacho