Founded in 1976 and taking the name Costco in 1983, this national warehouse club retailer has become a favorite for members due to the balance of price and product quality offered. Costco allows both members and non-members to enjoy the use of its home loan marketplace. Its partnership with many loan providers leads to an end product of strong Costco mortgage rates and a variety of loan products, including FHA, VA, and jumbo loans alongside fixed and adjustable-rate mortgages.
Costco Facts
- Membership-only warehouse club that emphasizes value and quality among the many products it offers to its shoppers
- Although mostly known for in-store shopping, Costco offers a variety of other services ranging from vacation packages to insurance and mortgages
- Costco doesn’t provide the loans directly; instead they created a marketplace that connects interested individuals with a number of home loan providers approved by the company
- Members benefit from a variety of Costco mortgage rates and some lower costs, such as a members-only hard dollar cap on loan origination fees that can otherwise be assessed as a percentage of the total loan
- Users of Costco’s mortgage rates marketplace don’t have to be members
- Costco’s loan program is managed entirely online; there are no physical locations to visit
Overall
Costco has offered a variety of cost-effective services to members since it was founded in the 1970s. The company does not have any notable internal experience originating or providing loans, but it does have a long track record of partnering with trustworthy, reputable external agencies to provide a number of services outside of retail sales to its members. It is also well-known for the level of service and support it offers to its customers. Costco has a very positive reputation and strong reviews for its mortgage program in particular.
The Costco Mortgage Program offers access to a variety of lenders to members and non-members, although certain members-only benefits will likely make some prospective home buyers consider signing up. Although not a lender in and of itself, Costco offers a centralized marketplace where users can receive detailed initial quotes, request more information, and even lock in a rate without a traditional preapproval process. While program participants should always be careful to vet the individual lenders they choose to work with, the Costco Mortgage Program is a trustworthy place to start.
Current Costco Mortgage Rates
Costco Loan Specifics
Costco mortgage rates are highly variable in many cases, due to the full range of lenders to which the company and its managing partner, First Choice Loan Services, offer access.
This means that a variety of individuals and families, across many demographics, can find the loan product that best addresses their needs and takes advantage of any unique attributes they may have, such as status as an active-duty service member or veteran, or qualification for a Federal Housing Administration or U.S. Department of Agriculture loan. Rates, terms, and conditions can vary significantly based on the specific financial institution with which you choose to partner.
In all relevant cases, members benefit from a cap on loan origination fees of $350 for Executive members and $650 for Gold Star and Business members, a significant difference from the one percent of total loan value commonly assessed.
Users of Costco’s loan marketplace have many options available, including:
Costco Fixed Rate Loans
As a product that offers long-term dependability concerning monthly payments and budgeting considerations, fixed-rate loans are an excellent choice for those who plan to stay in the same home for a significant period of time and find the terms and conditions offered to be favorable. Costco offers a variety of conventional loans from many different providers. Low down payment options are available, as are better rates and terms in exchange for a higher payment.
Costco Adjustable Rate Loans
The differentiator driving adjustable-rate loans are flexible rates that don’t require refinancing. This can mean paying less than a fixed-rate mortgage during the early years of the loan, but also paying more later on, depending on market factors. Those who plan to move or refinance relatively soon after receiving the loan may benefit the most from this arrangement.
Costco Jumbo Loans
Jumbo loans are intended for mortgages above the maximum conforming loan limit set for conventional loans by the Federal Finance Housing Agency. That upper limit is $453,100 in 2018. These loans are especially useful for homebuyers who are either targeting an exceptionally large property or one in a very desirable real-estate market. These loans frequently require a 20-percent down payment, which is an important consideration to keep in mind.
Costco VA Loans
Qualifying active-duty service members, veterans, and surviving spouses benefit from the many favorable terms and conditions offered through a loan insured by the Department of Veterans Affairs. Advantages include low or no down payments, no need for mortgage insurance, VA counseling in cases of significant financial concern, and availability to those with a broader range of credit scores. Everyone eligible for a VA loan should consider this option and compare rates against other mortgages for which they qualify.
Costco FHA Loans
FHA loans help first-time home buyers through lowered qualification requirements and a reduced minimum down payment. With competitive rates and a required down payment of just 3.5 percent of the loan’s total value for credit scores of 580 and above, FHA loans help those who haven’t owned a home before they buy their first house.
Costco USDA Loans
USDA loans help homebuyers in rural areas secure mortgages, though some suburban homes may also apply. These loans offer easier qualifying requirements, such as a zero down payment requirement. Because the federal agency guarantees loans issued by local lenders, rates are low as well. For those looking for homes in qualifying areas, the USDA loan is an especially attractive option.
Costco Mortgage Customer Experience
As a collection of loan providers gathered into a single marketplace by Costco and First Choice Loan Services, the Costco Mortgage Program does not have an individual ranking on the J.D. Power U.S. Primary Mortgage Origination Satisfaction Study. However, once a possible loan is identified, program participants can check the J.D. Power study to find out more.
Costco’s reputation for strong customer service carries over into its home loan program. The company offers a detailed initial quote request engine on its website and doesn’t stop there. Applicants can choose to then receive more detailed quote information from a variety of lenders, and can even lock in one offered rate even if no official preapproval has taken place. Costco works to ensure that its rates are consistent between what is initially provided online and the final offered terms before a loan is officially agreed upon, both for members and non-members.
The program includes an all-purpose contact number, 800-793-0759, available between 9 a.m. and 9 p.m. Eastern time, Monday through Saturday. The website allows interested homebuyers to receive quotes from lenders quickly, but does not offer much specific information or guidance except a detailed FAQ about the process – likely due to the many different financial institutions involved. The online nature of the interaction and lack of physical locations mean phone and online support is that much more important.
The initial rate request tool is robust and allows for the adjustment of many factors to compare initial rates and find the best quote possible. A Social Security number is not required for an initial quote.
Comments online about the service, such as those found through business rating site Trustpilot, are exceptionally positive. With no rating below four out of five stars and roundly supportive comments, it’s clear how users feel about securing mortgages through Costco.
Costco Mortgage Lender Reputation
The Costco Mortgage Program connects borrowers to lenders through an online marketplace. The Costco Mortgage Program earned a particularly high ranking on Trustpilot, with a 9.7 out of 10 rating, based on more than 500 reviews. Because Costco and First Choice Loan Services offer access to a variety of different lenders, there is no individual ranking for the program through the Better Business Bureau. However, ratings for individual lenders can be found easily through the BBB website.
- Information collected Nov. 14, 2018.
Costco Mortgage Qualifications
|
Credit Score |
Category |
Likelihood of Approval |
|
760 or higher |
Excellent |
Very likely |
|
700-759 |
Good |
Likely |
|
621-699 |
Fair |
Somewhat likely |
|
0-620 |
Poor |
Somewhat unlikely |
|
None |
N/A |
Unlikely |
Because the Costco Mortgage Program is an online marketplace that includes a large number of lenders and offers so many different types of loans, there is lots of flexibility involved.
Specific terms will differ from one lender to the next, and so will requirements. Still, understanding how credit scores impact rates and terms is essential. A review of common classifications can help develop an understanding of what to expect when seeking out initial quotes—generally, the higher the score, the easier it is to obtain whichever loan you’d like.
Consumers with lower credit shouldn’t abandon hope, however. Programs such as FHA, VA, and USDA loans are all good options for people with lower credit scores, and the many potential lenders available can make it easier to find a partner than by making individual inquiries from one bank to the next.
Costco Mortgage Phone Number and Additional Details
- Homepage URL: https://costcofinance.com/
- Company phone: 800-793-0759
- Headquarters address: 999 Lake Drive, Issaquah, WA, 98027
- States serviced: Nationwide
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