Costco and mortgage lending
After a year of testing, Costco has announced they will roll out a full service mortgage lending program on its website through their partnership with eleven lenders who have already issued over 10,000 mortgages under the program, according to CNN Money. Although the mortgages are not wholesale, they do claim to offer discounted closing costs and low rates for new mortgage applicants and refinance applicants.
The company already offers financial products like auto insurance and health insurance and stock brokerage services, and will soon offer auto and student loans. “We’ve always known that our members wanted more financial services,” a Costco spokesperson told CNN.
The Costco online mortgage program looks a lot like LendingTree, gathering quotes from a variety of lenders, but in the case of the Costco program, the borrower’s identity is private until they officially select a lender, so it is less of a lead generation portal than a servicing site.
Costco’s policies for all eleven lenders include accuracy in all terms including the rate, and rapid follow up on requests or questions, which will be monitored by their primary partner, New Jersey based First Choice Bank and Costco corporate. The company says they make no profit from the lending, rather is paid to market the services, so no surprise costs pop up at closing.
Mortgage lending has yet to move completely online across the board, as most people still need some level of hand-holding not only from a real estate professional but their lender, as they make the largest purchase of their lives. While Costco is not offering mortgages, rather offering a search portal online, the company appears confident in the quality of the services offered and is one of many locations consumers will go to in checking rates, so it is important for industry insiders and consumers to be aware of, especially if they’re also in need of a tub of 10,000 pretzels or 80 rolls of toilet paper.