The Mortgage Program for Costco Members is a multi-lender platform and marketplace where applicants can get competing mortgage loan offers from several lenders, and Costco members benefit from steeply discounted lender fees. This program is an excellent choice for any borrower, and especially for Costco members.
Read our full review of the Mortgage Program for Costco Members to find out if it's right for you.
Best for: Costco members
For Costco members, their mortgage program is a fantastic place to start and get matched with the lender that works best for them.
This mortgage lender is a good fit for: any borrower who wants to compare lenders. You don't have to be a Costco member to use its marketplace and compare offers from multiple lenders. But only Costco members get the added perk of a cap on lender fees.
Competitive and transparent interest rates: The Mortgage Program for Costco Members promises to offer the lowest mortgage interest rates. To make sure the lenders in the Costco marketplace do, the program performs weekly market surveys to check its lenders' rates.
Cap on lender fees: Lender origination fees are capped at $250 for Costco Executive members and $550 for Costco Gold Star members. Since origination fees are often 1%-3% of the loan amount, this benefit could equal several thousand dollars in savings.
Available in states and some territories: The Mortgage Program for Costco Members partners with lenders who make loans in all 50 states and the District of Columbia. The program is also available in Puerto Rico and the U.S. Virgin Islands.
Superior service: Costco is known for its generous concierge service and high level of customer satisfaction. The mortgage program is no exception. Costco's mortgage support center is available to any Costco member (not just borrowers who get loans through its marketplace). Members are encouraged to ask for help with any kind of mortgage question or problem.
Loan variety: Because many lenders participate in the program, the most common mortgage types are well-covered, including FHA loans and VA loans. Some less-common mortgage programs are available as well, like USDA loans and non-QM loans.
The unknown factor: The main downside to the Mortgage Program for Costco Members is the likelihood of individual lender limitations. You won't really know what the limitations might be until you get offers and apply. Some lenders may offer a fully digital mortgage application experience, while others offer a more hands-on approach. Some are likely to have physical branches where you can talk to a loan officer face-to-face, and others are only online.
Also, although Costco members can get assistance from the mortgage support team, Costco doesn't actually make or service the loans. You'll need to navigate one or two new relationships (the mortgage originator, and if your loan is then sold, the mortgage servicer).
The Mortgage Program for Costco Members is operated by CrossCountry Mortgage LLC via a multi-lender platform that anyone can use. Together, the participating lenders can accommodate most borrowers, including those with lower credit scores, lower down payments, or nontraditional documentation. Note that Costco is not a lender and does not make loans.
When you consider your readiness to apply, keep in mind that the best mortgage rates are reserved for borrowers with the best credit scores. You can apply for an FHA loan with a credit score as low as 500. But an applicant with a 720 credit score gets more loan options and a much lower interest rate, so ends up paying a lot less over time. A better rate can save you thousands -- sometimes tens of thousands -- of dollars over the life of the loan.
You should also look at your debt-to-income ratio. The more debt you have, the less the mortgage amount you qualify for. If you can, reduce your debt before you apply.
If you know your DTI, you know how much of a housing payment a lender might approve. Use a mortgage calculator to figure out what loan size is likely in your budget.
Costco's platform makes it easy to play around with credit score and down payment size to see how those factors can affect your rate and payment amount. If you know, for example, that your credit score is on the cusp between two ranges, you might want to improve your credit enough to lower your rate before you apply for a loan.
Quicken Loans: If cutting edge technology and superior customer service are your priorities, take a look at Quicken Loans. Mortgages are offered through the award-winning Rocket Mortgage app. Rocket Mortgage won a few different categories in The Ascent's 2020 Mortgage Lender Awards.
Flagstar Bank: Flagstar offers a great variety of traditional and specialty mortgage loans, like home construction loans and special low down payment loans. Flagstar serves all 50 states, plus the District of Columbia and the U.S. Virgin Islands. Flagstar also has a convenient online tool to compare interest rates and payment amounts as you change the down payment and credit score.
The Mortgage Program for Costco Members is a clear choice for Costco members. Its multi-lender platform is also a valuable resource for anyone shopping for a mortgage because they make it so easy to compare offers from several lenders at once. Shopping for the best product is a smart way to approach any major financial decision.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team. The Motley Fool has a Disclosure Policy. The Author and/or The Motley Fool may have an interest in companies mentioned.
The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.
Copyright © 2018 - 2021 The Ascent. All rights reserved.