Costco Wholesale Corporation has added home loans to its growing list of financial services, reports CNNMoney. The biggest warehouse membership chain is partnering with First Choice Bank, a New Jersey-based community bank, and 10 other lenders. Thus far, Costco’s partners have loaned 10,000 mortgages to members. Lauren Kutschka, manager of financial services, expects this number to grow as the program moves from its testing phase into a full-scale retail offering.
The company’s website advertises that the program offers “low fees, competitive rates, and excellent service” with the chance to save up to $5,000 for a typical loan. While individual household savings will vary, the estimated savings are calculated over a 7-year period, based on lender fees, rates, and points on a 4.125 % APR for a $250,000, 30-year fixed loan. Costco is paid for marketing the mortgage program, not for securing individual loans.
It’s no wonder that lenders want to tap into the warehouse giant’s tribe. In July of last year, Costco became the sixth largest retailer in the nation and seventh in the world. The new offering marks the increasing girth of the wholesale operation from retail goods to financial products. Costco plans to roll out auto and higher education loans in the near future. Members who utilize the Costco Mortgage and Refinancing Program ought to exercise the same judgment they would with any other provider. Shop, compare prices, and find the mortgage with the best terms at the lowest available interest rate.