Costco is stepping into the mortgage business with a new set of financial offerings on its website.
Costco, the popular warehouse club chain, is a great place for food, office supplies, clothing and…mortgages?
Yes indeed – Costco has partnered with First Choice Bank and 10 other lenders to offer home purchasing and refinancing products through its website in a user-driven way.
“The customer is in control; they choose who they want to call,” said Jeff Douglas, chief executive of Wyndham Capital Mortgage Inc. of Charlotte, N.C., one of the first lenders in the program. “This is a good part of our business.”
Here are some details of the new program:
- Members input their personal info and mortgage balance/loan amount on Costco’s website, which produces a list of licensed lenders in their state.
- There are three tiers of options, based on the level of membership the user has: all members can save up to $5,000 over the life of the loan; Gold Star Members have access to lender fees of $750 or less; and Executive Members can access fees of $600 or less.
- Chicago Real Estate Forum does point out, though, that loans will be treated to the same underwriting standards as conventional loans, so interest rates could change from the original rate members receive.
Brian Guzman, a Coldwell Banker agent in Lakeview, said his implementation of any Costco-driven mortgage plan would depend upon his client’s preferences.
“I would inform my clients that if they are ok with never seeing their mortgage broker in person or be able to walk into their office to sign papers, then the savings might be an advantage to them,” Guzman said via email. “My clients will still be able to review a TIL form. So, it is the same procedure, just a different avenue.”
Perceptions, Guzman said, will also be an important thing
“On the purchase contract, I would advise anyone to write First Choice Bank as their mortgage lender, not Costco,” he said. “A listing agent and seller probably doesn’t want to see a buyer that just submitted an offer has a pre-approval from an experimental phase of the wholesale giant.”