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Costco Mortgage Program Review: Is It Right for You?

Many or all of the products here are from our partners that pay us a commission. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.

Offer status

Costco is no longer offering its mortgage lending program as of May 1st, 2022. We recommend reviewing the alternatives to consider below or checking out the best mortgage lenders.

Costco -- your favorite go-big-or-go-home store -- can help you buy a home. No, you can't get a mortgage at the register, but Costco hosts a mortgage marketplace where you can get competing offers. It's called the Mortgage Program for Costco Members. You don't actually have to be a Costco member to use the marketplace, but Costco members get the biggest discounts. We think the Costco mortgage program is an excellent choice for any borrower, especially for Costco members.

Take a look at our full review of the Mortgage Program for Costco Members to find out if this is the option for you.

Full Mortgage Program for Costco Members review

This mortgage lender is a good fit for: Any borrower who wants to compare lenders. A Costco membership is not required to use Costco's marketplace and compare offers from multiple lenders. But if you are a Costco member, you get the added perk of a cap on lender fees.

Pros

  • Low origination fee for Costco members
  • Low mortgage interest rates
  • Superior customer service
  • Comparison tool makes shopping easier

Cons

  • Must be a member for the best pricing
  • Might not get a fully digital mortgage application experience

Top perks

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 fee

The origination fee is capped at $250 for Costco Executive members and $550 for Costco Gold Star members. Since origination fees are often 1% to 3% of the loan amount, this benefit could equal several thousand dollars in savings.

Available in all 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 services 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.

What could be improved

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).

Alternatives to consider

If cutting edge technology and superior customer service are your priorities: Rocket Mortgage is the leader in the transition to conveniently applying for a mortgage online or via a mobile app. The lender also consistently scores industry-leading ratings for service.

If you're wanting to find another lender with low rates and fees: Better Mortgage stands out with consistently low rates and fees that are among the best out there. What's more, the online application process is seamless and easy to use.

How to qualify

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 for a home loan, 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 smaller the mortgage payment you will 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.

How are the refinance rates through the Mortgage Program for Costco members?

The refinance rates on Costco's mortgage marketplace are a smidge higher than the purchase loan rates. Even so, you can qualify for a rate within about half a percent of the national average as long as your credit score is at least 660. With a lower score, some lenders charge higher interest rates.

How are mortgage rates through the Mortgage Program for Costco Members compared to the national average?

The Costco Mortgage Program's rates trend lower than the national average. Even with a credit score as low as 640, if you can make a 3.5% down payment, several partner lenders in Costco's marketplace offer a mortgage rate at or below the national average.

The Mortgage Program for Costco Members is right for you if:

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.

FAQs

  • Mortgage rates in this program are among the lowest in the nation. Costco checks participating lender rates frequently to make sure they can't be beat.

  • Absolutely. Anyone can take advantage of Costco's marketplace and mortgage concierge, not just Costco members. You only need to play around with the rate tool for five minutes to see that the offers are extremely competitive. The $250 to $550 cap on the loan origination fee for Costco members is icing on the cake. Other lenders charge a lender fee equal to 2% to 3% of the loan amount.

  • Yes. Refinance rates here trend below the national average, fees are low, and Costco offers ongoing concierge services to help with any issues or questions that come up.

  • The rate quote tool shows that you need a credit score of at least 620, but you might qualify with a lower score. Many of the participating lenders offer mortgages with more generous qualification criteria. Because the Costco mortgages marketplace includes many lenders who offer different varieties of mortgages, most applicants will be able to find a loan.

  • Because the Mortgage Program includes many lenders, you'll find a very large variety of loans. You will definitely find:

    • Conventional loan
    • FHA loan
    • VA loan
    • USDA loan
    • Low down payment loan
    • Jumbo loan
    • Fixed-rate mortgage
    • Adjustable-rate mortgage

    If you need a specialty loan, such as a construction loan, an investor loan, or a non-QM loan, you'll need to reach out to the individual lenders to find out which ones can help you.

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