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  • Costco Mortgages available in an Aisle Near You

    Yep.  You can now shop at Costco for just about anything.  True story:  a man ran into Costco for his weekly supply of nutri-grain bars and potato chips in bulk packs, and saw a brochure for Costco’s new Mortgage Lending offering.  He went home, researched it, filled out an application online, and received a few replies from the data base of lenders involved.  He ended up refinancing his 170,000 15-year fixed loan into a 30-year fixed at a lower interest rate, saving him a whopping $500.00 a month on the payment.  All from his need for potato chips!


    After a year of testing, Costco now offers mortgage and refinancing financial services, as the marketer, for New Jersey based First Choice Bank.  Costco does not make a profit from the borrower either from an origination fee or percentage of loan amount of the lender;  they only make money by offering and marketing the product, however they maintain the rights to oversee the process and have some strict guidelines that participating lenders must adhere to.


    Costco’s business and brand size is conducive to getting good deals, and they hope that this service will stay true to the trend.  It is estimated that borrowers can save big mostly on closing costs and the convenience factor. It will behoove the borrower and customer of Costco to do some checking and comparing in the mortgage arena before making a decision. The process is pretty simple:



    Costco monitors the process, and does not reveal the name of their customer until a lender is selected.  They also have a cap on the closing costs depending if you are an Executive member ($600.00 maximum) or Gold Star member ($750.00 maximum).  It is perfectly acceptable to upgrade to Executive for $50.00 to save $150.00 if you wish.

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    Their guidelines for the mortgage process called “First Choice Bank Costco,” or “Costco-Mortgage and Refinancing,” and/or  the tongue in cheek reference, “Bank of Costco,” are:


    borrower must be current on payments
    no cash out options
    speedy process
    lower credit scores accepted
    easier income and asset verification
    limited paperwork
    the refinancing MUST help the borrower
    will convert adjustable mortgages to fixed with a drop in the interest rate

    no loan-to-value (LTV) limits
    must be Freddie Mac or Fannie Mae owned or guaranteed loans
    loan must have originated before 5/31/2009
    borrower must have had no previous HARP loan
    the LTV must be larger than 80%

    borrower must be current on payments
    borrower must have no late payments in last six months
    borrower can only have had a max of one late payment in last year


    First Choice Bank has five branch offices and all are located in New Jersey, however they deal directly with lenders in Arizona, Colorado, Florida, Maryland, Pennsylvania and Texas.


    Consensus from the public is mixed from those who feel Costco doesn’t need to add a financial wing to their already over-loaded menu of offerings, and deem it greedy and disgusting; to those who embrace the program with a hefty discount of closing costs.  Costco definitely is one step closer to be a “one size fits all” environment.  At present, one can take their Costco membership card with them and with enough time and energy to navigate the enormous size of the Costco store, be able to:


    This does not even touch on simple pleasures like Holiday décor, books and ordering specialty cakes.  What does one more offering like mortgage services really matter in the large scheme of life?


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