Costco Mortgage Program overview
The Costco Mortgage Program is a marketplace that offers Costco members the ability to compare loan options and mortgage rates from several participating lenders. The Mortgage Program for Costco Members, as it’s officially known, was established in 2009. Costco itself is not a lender. To start the process, Costco members first must visit costcofinance.com, where they can review live rates and fees from participating lenders. After reviewing, members can submit an application with a lender through the platform to lock in their rate. Because Costco members and executive members pay low flat fees, there is a significant saving opportunity. In fact, Costco executive members could save an average of more than $9,700 over the life of their loan. Using this marketplace can also be efficient: Preapproval letters are generally available within 24 hours of the application, and closings usually happen within 30 days for a new purchase or 45 days for a refinance.
Costco members looking for competitive rates, a 24-hour preapproval and significantly discounted fees
- Rate-and-term and cash-out refinancing
- Investment property
Through the Costco Mortgage Program, executive-level Costco members pay lender fees of $250 or less, while Gold-Star and non-executive members pay lender fees of $550 or less. Lender fees include the application cost, underwriting, commitment and processing. (Third-party fees, such as appraisal and title insurance, are not included.) In addition to its standard discount for members, Costco sometimes offers additional discounts. The marketplace provides a fee estimate from each lender according to your loan details. You’re then able to select up to four lenders to receive a full fee quote and request a formal loan estimate.
Mortgage rates are published on the Costco Mortgage Program website and are refreshed as the market changes, multiple times per day.
The Costco Mortgage Program has a Net Promoter Score of 83 and a Trustpilot ranking of 4.8 out of five stars, both of which are considered excellent.
The Costco Mortgage Program offers a streamlined online application process with the opportunity to chat, email and text with a participating lender. The marketplace’s website also offers mortgage and payment calculators and tools to help borrowers understand the process. There is no ability to obtain an instant online prequalification or preapproval, however, nor a mobile app, though borrowers can log in through the website to check on loan status. E-signature is available in the states that allow it.
Minimum borrower requirements
The Mortgage Program for Costco Members’ multi-lender marketplace is open to borrowers with various credit scores, debt-to-income (DTI) ratios and down payment amounts. As with most mortgage lenders, the specific loans offered are dependent on the borrower’s creditworthiness, income and other factors. In general, lenders follow Fannie Mae and Freddie Mac’s underwriting guidelines, which means that on a conventional fixed-rate loan, you can put as little as 3 percent down and have a minimum credit score of 620. For adjustable-rate loans, the down payment requirement increases to 5 percent. Most lenders also follow the guidelines for FHA loans and VA loans. You might be able to qualify for an FHA loan with a credit score as low as 500 and a DTI ratio as high as 50 percent. For a VA loan — reserved for military members, veterans and their families — you’ll generally need a credit score of 620 or higher and be able to show that you have low debt relative to your income.
Refinancing with Costco Mortgage Program
The Costco Mortgage Program offers competitive refinancing rates and uses an independent evaluation company to ensure they stay that way. The fees and member discounts are the same for refinancing as they are for new mortgages.
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Breakdown of Costco Mortgage Program overall review score
- Affordability: 14.75/15
- Availability: 18/20
- Borrower experience: 9/10
To determine a mortgage lender’s Bankrate Score, Bankrate’s editorial team rates lenders on a scale of one to five stars based on a variety of factors relating to the lender’s products and services. Bankrate’s partners compensate us, but our opinions are our own, and partner relationships do not influence our reviews. Here is our full methodology.