Mortgages for Costco Members
Warehouse retailer Costco has also been helping its members with refinancing their mortgage loans.
Costco has been providing a marketing gateway for its members and 10 mortgage lenders from around the country for about a year, according to Jay Smith, director of business and financial services for Costco.
Smith declined to share how many mortgage loans the firm has facilitated during that year, but said it was in the thousands and the loans represented tens of millions of dollars in volume.
Costco has partnered with First Choice Bank of New Jersey, which provides the platform for collecting basic data from mortgage-seeking Costco members. The data include the dollar amount of the loan sought, the type of property it is, the credit range of the borrower and other sorts of details, but no information like social security numbers, Smith said.
First Choice shares the data with other lenders that then offer the member a mortgage loan and a given rate. The member then chooses which lender he or she wants to approach for a loan. Costco has established member-friendly rules for lenders participating on the site. Mortgage fees are capped for Costco Executive members at $600 and $750 for Goldstar members, and lenders agree to keep their mortgage rates within certain parameters and to maintain high service standards.
Smith would not discuss the interest rate parameters, but he said the company works with First Choice to monitor consumers using the service and surveys members to measure member satisfaction with the lenders, which includes both nationwide and regional lenders.
Smith said that the firm would be open to working with credit unions in the program, but said that the retailer felt constrained by the work required to manage the program at its current size.
“Whenever we add another lender we have to ramp up the monitoring and administrative side of the program so we haven’t done that very often,” Smith said.
But he would not rule it out either, saying that the retailer was a little surprised at how popular the refinancing site had become in the year since it Costco launched it.