Costco Mortgage Review

    Costco Mortgage Review: What You Can Expect From The Costco Mortgage Program

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    Costco is known across the US as a members-only warehouse store where you can score big savings on groceries and other essential items. But aside from the usual products, Costco has also expanded its offerings to include life insurance and home loans as well. 

    While Costco is a good place to get a bargain on bulk items and roast chicken, can the same be said for its mortgage products? Costco itself is not a lender, but it does offer an online marketplace called the Costco Mortgage Program. Here, members and non-members can browse and compare home loan rates, as well as send applications to different lenders online. 

    In this Costco mortgage review, we take a closer look at the Costco Mortgage program and whether it’s worth getting a membership for. 

    What To Look For In A Mortgage Lender

    Before we go deeper into our review, let us talk about the five factors we considered in our assessment of Costco’s mortgage offerings and service: 

    Home Loan Types

    Not all mortgages are made the same, and not all lenders offer the type you need. Here are five of the most common types of home loans, explained:

    Conventional Mortgage

    A conventional mortgage is a home loan that is not insured by the federal government but is rather backed by a private lender. There are two kinds of conventional mortgages: conforming loans, which fall within the maximum borrowing limits; and non-conforming loans, which are also known as jumbo loans. 

    When it comes to conventional mortgages, the rule of thumb is to pay 20 percent of your principal as your down payment. If you can’t hit 20 percent, expect to pay for Private Mortgage Insurance (PMI) which gives companies the assurance that they get their money back. However, in recent years, more and more companies have allowed borrowers to pay less upfront, sometimes even allowing as little as 3 percent down. 

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    Jumbo Mortgage

    Jumbo mortgages help you borrow beyond the maximum limit set by the Federal Housing Finance Agency. For 2021, that limit is at $548,250 for single-family homes in 48 states. In Hawaii, Alaska, and other high-cost markets, the limit is $822,375. 

    Jumbo mortgages are harder to qualify for, requiring at least 10 percent down from borrowers. You’ll also need a credit score of 700 or higher to be eligible. 

    Fixed-Rate Mortgage

    If you want your interest rate to stay the same throughout the life of your mortgage, a fixed-rate mortgage is the way to go. But with more predictability comes the risk of paying more than you would with an adjustable-rate mortgage. This is because these mortgages typically come with longer terms and higher interest rates. 

    Adjustable-Rate Mortgage

    With an ARM, you get to pay a fixed (and usually lower) rate for a certain number of years, then switch to a variable rate that fluctuates each year with market changes. Though this puts you in a more unpredictable situation, it allows you to save a bit more on premiums and interest, especially in the first few years of the loan. 

    Government-Issued Mortgage

    The government issues three types of loan products – FHA, VA, and USDA loans: 

    • FHA Products - The Federal Housing Administration offers home loans for low-income borrowers, requiring only a 580 credit rating and as little as 3.5 percent down payment. 
    • VA Products - These products are given to active duty members and veterans of the United States Army and their families. Usually, VA loans come with low interest rates and zero down payment options, as well as a Private Mortgage Insurance requirement. 
    • USDA Loans - If you’re looking to buy a house in a rural area, this loan may be for you. The USDA offers zero-down home loans to low-income borrowers if their home is in a USDA-eligible area. You can expect low interest rates as well.
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    Affordability: Mortgage Rates And Fees, Requirements, Etc.

    We look at affordability in two ways:

    1. Does a company offer products to people with average or below-average credit scores, debt-to-income ratios, and a limited ability to pay down?
    2. Does a company charge a lot for things like application fees, underwriting costs, closing fees, and the like? 

    That said, these are the information we use to compare affordability across lenders:

    • Minimum credit score requirement: Your credit score informs lenders about your creditworthiness or your ability to pay bills and debts on time. Though credit scores range from 300 to 850, most companies will require borrowers to have a score of 620 or higher. For bigger loans, you may need to bring your credit score all the way up to 700.
    • Minimum debt-to-income ratio: This is a number reflecting how much money you owe relative to your monthly income. The ideal ratio is about 40 percent.
    • Minimum down payment: As mentioned, lenders used to require 20 percent down for all kinds of home loans. Otherwise, borrowers would have to cover a PMI on top of their monthly payment and interest rate. However, more and more lenders are easing up on this, allowing borrowers to pay lower down payments.
    • Additional fees like origination fee and closing cost: Your down payment isn’t the only expense you have to budget for before the first installment. To secure a mortgage, you’ll also have to cover application fees, underwriting costs, closing costs, origination fees, and possibly more. 

    Application Process

    Nobody wants to endure a long application process, so it’s essential to ask for a timeline from your lender. But aside from a shorter process, it’s also good to look out for lenders that’ll let you process your application online or over the phone. This minimizes the time and energy spent meeting up with a broker or a financial specialist. 

    We also put a premium on mortgage lenders who provide mortgage rates on their website because this streamlines the process even more.

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    Customer Service And Satisfaction

    To make sure a company has a good customer service track record, we consult two third-party agencies: the Better Business Bureau and JD Power. 

    The BBB is an agency that rates companies from A+ to F, depending on how trustworthy they are. The BBB’s assessment reflects how it thinks a business is “likely to interact with its customers”. What do they look at? Companies’ complaint histories, advertising issues, licensing and government actions, and transparency in business practices.

    JD Power, on the other hand, specializes in data analytics and consumer insights, reporting on and ranking different companies from a range of industries. In 2020, the marketing firm released a U.S. Primary Mortgage Origination Satisfaction Study, which measures mortgage lenders’ “overall customer satisfaction based on performance in the application/approval process; communication; loan closing; and loan offerings.” 

    We also look at companies’ channels for communication, such as hotlines and online portals. 


    Finally, we also take availability into consideration. Is a company available in all 50 states or only a select few? 

    Costco Mortgage Review

    Costco is an American membership-only wholesale store with over 700 branches around the world. 

    Costco Mortgage is an online marketplace program for Costco members and non-members. The marketplace, provided by CrossCountry Mortgage, LLC, was established in 2009 and created to give members a “streamlined and transparent process from the first point of contact to the moment you receive your house keys”. 

    Costco Mortgage gives members and non-members the opportunity to compare loan products and mortgage rates from multiple lenders – all from the comforts of their phones and computers. This means that Costco is not a lender per se; instead, it connects borrowers with potential mortgage lenders. 

    One of the biggest draws to Costco’s Mortgage Program is the discounts on lender fees. While the marketplace is a mortgage program for Costco members and non-members alike, Costco members have the advantage of getting discounts on origination fees. For Gold Star members, origination fees are capped at $550, while Executive members need only pay up to $250. 

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    Loan Types Offered

    Costco offers home loans from the following participating lenders:

    • Mutual of Omaha Mortgage
    • Intercontinental Capital Group 
    • Strong Home Mortgage
    • NBKC Bank
    • Consumer Direct Mortgage
    • CrossCountry Mortgage
    • Box Home Loans
    • NASB Home Loans

    On the marketplace, you’ll be able to find the following loan types:

    • Conventional loans
    • Jumbo loans
    • Fixed-rate and ARMs
    • Veteran loans
    • FHA loans

    Unfortunately, Costco does not offer any options for USDA mortgage loans.


    According to the website, credit score requirements vary per lender. You’ll have to check in with a specific lender to find out what kind of credit score you need to qualify. 

    When it comes to the down payment, the Costco Finance website states that most lenders “generally required a 20 percent down payment”. If you can’t hit 20 percent, you will likely have to pay private mortgage insurance. However, the site also explains that there are “a variety of mortgage products” which require lower down payments (as low as 3 percent), as well as programs that help first-time buyers.

    As mentioned, there is a discount program for Costco members only. Costco gives exclusive discounts on lender fees to Costco members, with different caps for different tiers. Gold Star members get a $550 cap on origination fees, while Executive members’ lender fees are capped at $250. According to their website, Costco Executive members could save up to $8,000 over the typical life of their loan. 

    Application Process

    To apply for a loan, you simply go to, select the Services tab, and go to the Mortgage Program option. There, you fill up a form detailing your loan needs and current situation. After submitting your details, you’ll get a selection of home loan quotes tailor-fit to your needs.

    Through the Mortgage Program, you can also upload and submit required documentation and access licensed mortgage professionals or loan officers for assistance. 

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    Customer Service And Satisfaction

    For questions and concerns on loan-related matters, you can contact Costco Finance through their call center at 888-650-6814, from 9 am to 9 pm Mondays through Fridays, and from 12 pm to 4 pm on Saturdays. You can also submit an inquiry through the Costco member support website. Just fill in the form with your name, phone number, email, and comment or question.

    Because Costco isn’t a loan lender, it doesn’t have a ranking on JD Power’s U.S. Primary Mortgage Origination Satisfaction Study. We did, however, take a look at some of the loan lenders affiliated with the Mortgage Program to see if they ranked on the list. Unfortunately, none of the nine participating lenders made the top 15 on JD Power’s survey. 

    And although Costco has an A+ rating from the Better Business Bureau, it isn’t a BBB-accredited company. It also has middling reviews on the BBB website. As such, when it comes to customer satisfaction, it’s a little hard to tell whether Costco’s loan marketplace really delivers.


    As an online marketplace, Costco Mortgage is available to anyone with access to a computer or a mobile phone. 

    Costco Mortgages: Pros And Cons


    • Offers discounts exclusive to Costco members
    • Provides the option to choose from multiple lenders 
    • Shows relevant information, like loan amount and interest rate details for each loan offered by a participating lender
    • Mostly online application process
    • Available to both Costco members and non-members


    • Not a direct lender and can only connect borrowers with a potential lender
    • Does not provide enough information on the loan products offered by participating lenders on the website
    • None of the participating lenders rank high on JD Power’s satisfaction survey

    The Bottom Line

    Rather than scouring the web and comparing rates and mortgage products across different sites, Costco’s Mortgage Program allows members and non-members to do it all on one convenient site. This can help save you a lot of time researching and comparing potential lenders. 

    Apart from this, Costco members can look forward to exclusive savings on lending fees. However, it’s hard to get a clear picture of its customer satisfaction online, leaving us with a lot of uncertainty about the quality of Costco’s mortgage services.

    Whether you’re interested in other mortgage lender reviews, want to understand the ins and outs of mortgages, or would like to find more information on other personal finance matters, Wesley Mortgage, LLC has something for you. Head over to our website to gain insight into all things finance!

    Written By Ed Wallace
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