Slickdeals Saves U! Vote for our Slickdeals scholarship finalists! Learn More
Forum Thread

Refinancing mortgage with Costco. Anyone have any feedback?

Behave 4,335 942 August 5, 2016 at 04:11 AM
Deal
Score
0
2,640 Views

Thread Details

I was shocked at the fees Chase wanted.

How is refinancing with Costco?

https://costcofinance.com/?campai...gle.com%2F

11 Comments

1

Sign up for a Slickdeals account to remove this ad.

#2
I am a fan of Costco (just shopped there yesterday) however I have no experience with their finance division. The website link you provided reflects they pass the loan off to First Choice Loan Services, a separate company.

I am admittedly biased and suggest you compare with an experienced mortgage broker as they are working with wholesale conduits that have minimal lender fees, deliver competitive pricing and provide superior service.

There are always closing costs for items such as appraisal, title, settlement, etc, however you may look at your rate options and see if it makes sense to have a rate that provides a lender credit to cover some costs. A good broker will show you a stack of all rates and their associated price (whether having a cost or a credit) and have many wholesale conduits to best place your specific loan, which in many cases is important as every scenario is unique and not all lenders are the same.

Just my .02.
Reply Helpful Comment? 1 0
-Adam
Old Hippy & Mortgage Pro
Joined Nov 2005
L10: Grand Master
25,360 Posts
3,377 Reputation
#3
Well it's clear that Costco doesn't actually write the mortgage here.... they probably get some kickback for coordinating mortgage services with the outside lender. That said, I wouldn't treat them any differently than any other lender - IOW don't assume that since it's related to Costco, you're getting the best deal.
Reply Helpful Comment? 1 0
#4
I looked into doing a purchase with them; was not cost effective. Better place to look is Zillow Mortgage Marketplace. Closed on a purchase in June. 3.5%, almost no cosign costs.

https://www.zillow.com/mortgage-rates/
Reply Helpful Comment? 0 0
#5
Go with Pentagon Federal Credit Union [penfed.org]. They are going to be way cheaper than Costco, I am can almost guarantee it. I used them earlier this year and was very happy with the process. I went from a 4% 20 year (16 left) to a 2.5% 15 year mortgage. Saved me like $10-20k over the life of the loan. You can become a member by joining one of a couple military support organizations (for like $15 or $20).

Their current rates:

30 year fixed:
RATE POINTS APR
3.375% 0.000 3.501%
3.250% 0.750 3.436%
3.125% 1.375 3.361%

20 year fixed:
RATE POINTS APR
3.125% 0.000 3.354%
3.000% 0.625 3.299%
2.875% 1.250 3.244%

15 year fixed:
RATE POINTS APR
2.625% 0.000 2.880%
2.500% 0.625 2.844%
2.375% 1.250 2.809%
Reply Helpful Comment? 0 0
Joined May 2007
Ban Republican Marriage
884 Posts
274 Reputation
#6
Those rates are nice. Now I'm tempted to refi, lol... Curious if you used a physical branch location or did it all remotely? There aren't any locations anywhere near me. Thanks.

Quote from Pitter98 View Post :
Go with Pentagon Federal Credit Union [penfed.org]. They are going to be way cheaper than Costco, I am can almost guarantee it. I used them earlier this year and was very happy with the process. I went from a 4% 20 year (16 left) to a 2.5% 15 year mortgage. Saved me like $10-20k over the life of the loan. You can become a member by joining one of a couple military support organizations (for like $15 or $20).

Their current rates:

30 year fixed:
RATE POINTS APR
3.375% 0.000 3.501%
3.250% 0.750 3.436%
3.125% 1.375 3.361%

20 year fixed:
RATE POINTS APR
3.125% 0.000 3.354%
3.000% 0.625 3.299%
2.875% 1.250 3.244%

15 year fixed:
RATE POINTS APR
2.625% 0.000 2.880%
2.500% 0.625 2.844%
2.375% 1.250 2.809%
Reply Helpful Comment? 0 0
A working person voting Republican is like a chicken voting for Colonel Sanders.
#7
Always keep in mind that when you see zero points that there are customarily additional lender fees associated. The rate means nothing without measuring all fees against each other.
Reply Helpful Comment? 0 0
#8
Quote from think22 View Post :
Those rates are nice. Now I'm tempted to refi, lol... Curious if you used a physical branch location or did it all remotely? There aren't any locations anywhere near me. Thanks.
Was all done electronically and over the phone. The only thing that I had to see an actual person about was for the closing, and that was done from the comfort of my kitchen table. I used First American Title instead of their in-house title company....saved a couple hundred bucks also. And yes, there will be fees involved - somewhere in the neighborhood of $2,000 to 3,000. Add another $1000 or so if you pay points to get the rate lower. I rolled most of the fees into the loan so I didn't have as much out of pocket. Even with doing that, I am saving a ton. I also did the biweekly mortgage payments since my monthly payment was going down - shaved another year and a half off the loan. All in all I was pretty happy with the process.
Reply Helpful Comment? 0 0

Sign up for a Slickdeals account to remove this ad.

#9
Quote from tiedyed1 View Post :
Always keep in mind that when you see zero points that there are customarily additional lender fees associated. The rate means nothing without measuring all fees against each other.
Very true. Here is the breakdown of what I paid for fees:

Non-negotiable fees:

Origination Fee: $1360 (PenFed's closing fee)
CLO fee: $65
Appraisal: $365
Credit Report, Flood Certification, etc: $82
Recording Fees: $74
Pre-paid interest: Variable based on dates and loan amount, but I paid $150.

(Somewhat) Negotiable fees: You can shop for these - First American Title was cheapest
Title Insurance: Variable based on loan amount, but is a fixed rate set by state - I paid $533
Closing Fee: $150

Total costs: $2780 for a ~$135k loan.

Most of the fees associated with a refinance/purchase are fixed or a fixed rate and there is no savings to be found. The only fees that are truly negotiable (only to an extent based on the lender and title company) are the origination fee and the closing fee. Don't be fooled by a "no closing cost" refinance - they are really just rolling the fees into the interest rate and you pay more over the life of the loan.
Reply Helpful Comment? 0 0
#10
When I refi'd several months ago I didn't find penfed competitive against other online-based lenders when it came to fixed loans. Their origination fee is high at 1% and their quotes were higher than other lenders I shopped around with (Sebonic Financial, BNC National Bank, Aimloan, Penfed, HomeDirect Mortgage, E-Rates Mortgage). Pendfed gave the highest quote. The lender I went with was over $2000 cheaper than pendfed after crunching all the numbers. It actually ended up being a no-cost refi and I actually made a few hundred dollars back at the end.

Penfed does have a great reputation when it comes to ARM loans though. I suggest shop around if you are going the online route vs a mortgage broker vs bank/creditunion. As others already mentioned always compare fees, points as well.
Reply Helpful Comment? 0 0
#11
I almost refi'd with one of the costco lenders but glad I didn't.

They do have great rates but I compared it with my local lender and they came out ahead of the game with no closing costs for me.
Reply Helpful Comment? 0 0
#12
We also didn't find PenFed competitive. I mean, they were better than walking into "Big National Bank" and asking for the current numbers, but they weren't the cheapest, in part because they had a typical 1% origination fee.

We went down to 3.625% with no origination fee and a lender credit by using the cheapest option on Zillow at the time. Still had to pay the closing agent (we used our own that we liked) and re-up the title insurance, plus the appraisal and a few very small charges, but it was all-in about $1200 out of pocket to save $300 monthly.

With a purchase I think having a local agent was great, especially to keep things moving and make sure the closing happens on schedule, but for a re-fi? We just went with lowest cost.
Reply Helpful Comment? 0 0
Page 1 of 1
1
Join the Conversation
Add a Comment
 
Copyright 1999 - 2016. Slickdeals, LLC. All Rights Reserved. Copyright / Infringement Policy  •  Privacy Policy  •  Terms of Service  •  Acceptable Use Policy (Rules)  •  Interest-Based Ads
Link Copied to Clipboard