Costco Mortgage Mortgage Review 2020

By Mitch Strohm

About our reviews

Bankrate’s editorial team researches, reviews and rates lenders to help you find one that fits your needs. Our experts consider a range of factors, including rates, loan types, time to close, fees and more. Reviews are updated regularly. Bankrate is an independent, advertising-supported comparison service. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy.

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4.3

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Please note: In response to the coronavirus pandemic, lenders are changing their requirements continuously. Although we strive for accuracy at the time of publication, please be sure to check with the lender for updated details on down payments, credit scores, etc.

Costco Mortgage, the lending arm of Costco Wholesale, is a marketplace that offers Costco members the ability to compare loan options and mortgage rates from several participating lenders. The Mortgage Program of Costco Members, as it’s officially known, was established in 2009. Costco is headquartered in Issaquah, Washington. "Having multiple licensed mortgage lenders who are dedicated to supporting Costco members creates a unique opportunity for Costco members to receive committed service and values rarely experienced anywhere else in the mortgage industry," says John Alexander, CEO of Affinity Partnerships, which designed and manages the platform under the oversight of Cross Country Mortgage. Costco itself is not a lender. To start the process, Costco members first visit www.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.

Nationwide availability

Available in all U.S. states and the District of Columbia

Minimum credit score

Credit requirements vary by lender in the marketplace. Here are typical minimum credit requirements for various loan types: 620 for conventional loans; 660 for jumbos; 500 for FHA.

Loan types

Conventional, VA, FHA, fixed-rate, adjustable-rate (ARM), jumbo; refinancing options include rate-and-term refinancing and cash-out refinancing

Pros

  • Discounted lender fees
  • Online marketplace allows you to compare products and rates from multiple lenders
  • Often funds loans in less time than the industry average

Cons

  • Program only available to Costco members
  • Doesn't offer home equity loans or home equity lines of credit (HELOC)
  • Doesn't offer government-insured USDA loans

Find your mortgage match

Get paired with your best mortgage offers in 2 minutes or less.

Costco Mortgage overview

Loan types

  • Conventional
  • VA
  • FHA
  • Fixed-rate
  • Adjustable-rate (ARM)
  • Jumbo
  • Refinancing including rate-and-term refinancing and cash-out refinancing

Lender fees

Executive-level Costco members pay lender fees of $350 or less, while Gold-Star members pay lender fees of $650 or less. Lender fees include the application cost, underwriting, commitment and processing. Third-party fees, such as appraisal and title insurance, are not included.

Costco’s marketplace provides a fee estimate from each lender according to your loan details. You’ll get a full fee quote once you choose a lender and request a loan estimate.

In addition to its standard discount for members, Costco sometimes offers additional discounts.

Minimum borrower requirements

Costco’s multi-lender marketplace is open to borrowers with various credit scores, debt-to-income (DTI) ratios and down payment amounts.

In general, it follows 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 requirements increase to 5 percent.

Typically, you’ll need a debt-to-income ratio of 43 percent or lower to qualify for a conventional loan. That means that your total monthly debts cannot exceed 43 percent of your gross income, although there are some exceptions.

The Costco marketplace follows government-issued guidelines for FHA loans. That means you may be able to qualify for a loan with a credit score as low as 500 and a debt-to-income ratio as high as 50 percent. It also follows government guidelines for VA loans. For a VA loan, 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.

Get started with Costco Mortgage

Borrowers can apply through the marketplace at any time, online or by phone. Loan officers are not available to take applications at Costco warehouses.

Hours

Monday - Saturday: 9 a.m. - 9 p.m. EST Sunday: Closed Contact: 855-799-3268

Costco Mortgage consumer rating and reviews

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