Now You Can Get A Mortgage at Costco

There are many ways to get a mortgage, but have you ever considered getting one from Costco? The wholesaler's new program is gaining in popularity and it could be the future of finding a mortgage loan.

In addition to gallons of mayonnaise and the many other bulk items that you can get when shopping at Costco, the wholesale giant is now giving their members an opportunity to get a mortgage loan while visiting the store.

The idea has already been in a testing phase for about a year and it is getting some very positive feedback from members. Costco is working with major nationwide lenders to offer this service. In the last year, more than 10,000 Costco members have applied for mortgages under the program and those numbers are expected to increase as the program becomes more known. According to Lauren Kutschka, the manager of financial services at Costco, the company plans to aggressively market the mortgage plan in the upcoming months by putting more prominent displays in the stores and by advertising it in the weekly Costco publication – Connection.

Here’s how the mortgage lending program works through Costco: Log on to Costco’s website and look for the mortgage loan section of the site. Enter the information that it asks for and wait for the offers to come in. You could receive offers from any number of the 10 mortgage partners that the wholesale company is working with if you qualify under their standards. These offers will include information about closing costs, mortgage rates, loan terms and more right upfront. According to some members who have already tried the program, the closing costs that were offered by these lenders was only about a third of what other lenders were charging outside of the Costco program.

If this Costco program sounds familiar, it may be because the company tried entering into the mortgage lending industry a couple years ago. However, the service provider that Costco was working with simply wasn’t working out. So Costco started from scratch with this new program. One of the ways that the Costco program is different than other mortgage lending programs online is that the applicant’s identity is not revealed to the potential lender until the applicant chooses a mortgage company to go with. When using other websites, the information you fill out on your loan application is accessible by a multitude of lenders who can then start sending advertisements and marketing materials to you right away.

Just because it is so easy to use and the lenders that are partnering with the program are trusted by the Costco company does not mean that the borrower doesn’t have to do their homework, though. You will still need to compare the offers and the companies before making your final decision. Costco does try to police the lending partners to make sure they are complying with certain policies that are set forth by Costco, including giving accurate information about the rates that a borrower can qualify for and providing accurate information about mortgage terms. With the technology that is used, Costco is also able to monitor each application to ensure the lenders are handling each case property and efficiently.

In case you’re wondering, Costco is not making any profit from the home loans themselves. The company is only getting paid to market the service to its members. If you’re looking for a home loan, would you feel comfortable getting one through this program?

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Are New Lending Rules in Store for Mortgage Service Providers?

Have you been hesitant to purchase a home because of all of the unethical practices you have heard about lenders doing? There is a new proposal to curb these practices so you can have more confidence in buying a home and financing the mortgage.

In the latest effort to help homeowners avoid foreclosure and get a better understanding of their monthly mortgage payments, the federal government is proposing new rules this week for banks and borrowers. The department known as the Consumer Financial Protection Bureau is in charge of the proposed changes and here are some of the new rules and regulations that they have been discussing:

  • Mortgage servicers would be required to give all home loan borrowers a standardized monthly statement for paying their installment.
  • Home loan lenders would need to give borrowers a warning when they are about to receive an interest rate increase or a change in their homeowners insurance.
  • For borrowers who are in danger of facing foreclosure, the lender would have to make reasonable efforts to contact those borrowers and provide them with potential options to avoid losing their house.
  • If a borrower needs foreclosure counseling, the lender would be required to provide it as part of the proposed rules and regulations.
  • Mortgage servicers would be required to keep better records on all of their transactions and clients.

The proposal has not been formally presented to Congress or to the public. These are just some of the ideas that they have been discussing behind closed doors. The agency said that it plans to formally present these new rules sometime in the summer and if they pass, they hope to finalize them early in 2013.

The proposed new rules come on the heels of a foreclosure crisis that resulted in about 8 million American homeowners facing the problem of losing their home since 2006 when the housing bubble burst. Many of the homeowners that were affected blame mortgage companies because, as the homeowners say, the lenders did not verify the information on the foreclosure documents which meant that many people were wrongfully kicked out of their home. You may remember the “robo-signing” scandal in which employees in many of the major banking and lending institutions were told to simply sign documents for approving foreclosures without reading the papers to ensure they were legally required to move out of their home.

Just a couple months ago, five of the most well known mortgage lenders in the country decided to do an overhaul of their practices when providing mortgages to borrowers and they also paid a combined $25 billion to the various states in order to help people who were victims of the unlawful foreclosure process.

Maybe if these new rules go into effect, we will see the housing market start to turn around as buyers will have more confidence in the mortgage lending industry. Does that sound reasonable?

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Four Common Myths about the Home Buying Process

There is a lot of misinformation out there about buying a home and the various steps throughout the process. Here are some of the most common myths and misconceptions and the truth behind them.

Whether you are a first time home buyer or if you have purchased a couple homes in your lifetime, there are several myths and misconceptions that you may believe which can affect your purchase. And when it comes to real estate, knowing the difference between myth and reality can mean the difference of thousands of dollars and peace of mind as a buyer. If you want to avoid mistakes that are caused by misinformation, here are some common misconceptions that you should know about.

1. Eventually, the perfect home will fall into my lap if I wait long enough.
When it comes to buying real estate, it is virtually impossible to find the “perfect” home. That’s because the perfect home simply does not exist. Even homes that are brand new have things wrong with them that you may need to fix. It’s much better and more productive to look for a “perfectly acceptable” home that you will thoroughly enjoy living in for many years.

2. I should not limit myself to one real estate agent. I should have several working for me.
Some home buyers think that it is better to have several agents working on their behalf. While this might seem like the best idea, it is actually counterproductive. For one thing, all real estate agents have the same database that they are working from. So if you have several realtors working for you, you may end up looking at the same homes which wastes your time and theirs. Also, many agents insist that you sign an exclusivity agreement stating that you will only work with them. If an agent does not ask you to sign such an agreement, there is a good chance that they are just starting out and they may not have any other clients that they are working for at the time.

3. I do not need to read all of the fine print on the home buying contract.
Whether you are buying or selling a home, the process is very involved and there is a large sum of money at stake. As such, it is important that everything is spelled out in writing, including closing costs and other information that both parties should know. Also, home buying and selling practices change from time to time so it’s important that all parties know the agreements that they are entering into to avoid major misunderstandings which can lead to lawsuits and added expenses. Always read the fine print before signing a contract or you could be setting yourself up for major problems.

4. It is nearly impossible to qualify for a mortgage these days. I should not even try.
While there was a time in recent years when it may have been next to impossible to qualify for a mortgage, the regulations are starting to loosen and banks are starting to offer mortgages to buyers who have less than perfect credit. There are also several programs available to help buyers who do not have great credit and the buyers with great credit will have more options, but it’s always worth a try. Take a few months to clean up your credit report as much as possible and apply for a mortgage. The worst that can happen is that you get turned down.

Being an educated home buyer is essential in today’s market. Do your homework and research and you can be an informed buyer.

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