Costco Wholesale, Inc. has decided to “partner” with First Choice Loan Services, Inc. to offer their members a series of mortgage loan products according to their website. Supposedly Costco members are being offered a somewhat better deal than non-Costco members would be offered by First Choice Loan Services. Costco claims that their role as a wholesaler means that partnering with First Choice Loan Services Inc. to provide their members with a variety of Mortgage Services including first-time home buyer programs, home refinancing, home purchase and other residential mortgage loan products.
Mortgage Program is Not a Costco Product
The most disconcerting quality about this mortgage program is the disclaimer at the bottom of the Costco website announcement of their partnership with First Choice. “Mortgage lead generation, and/or originations are provided by or through Berkshire Bank and its wholly owned subsidiary First Choice Loan Services Inc. …Costco and its affiliates do not take loan applications, offer, negotiate, arrange or make mortgage loans or lines of credit. Costco does not guarantee products or services offered by First Choice Loan Services Inc. Berkshire Bank is an FDIC insured Massachusetts chartered bank.”
Must Evaluate First Choice Loan Services, Not Costco, to Know the Deal
First Choice Loan Services sounds more like a broker than a direct lender, which means they shop a loan for you rather than provide the loan itself. The layers of companies involved all suggest fees and service charges that may not be well described. Quite specifically, Costco’s website says “Whether you are purchasing or refinancing, First Choice Loan Services Inc. puts you in touch with lenders who offer outstanding services and discounts exclusively for Costco members.” The costs of the loan as far as fees and service charges are not as clearly described or centered in this company’s description of their services. Remember, all retail home loan companies charge you for the privilege of their expertise and service in setting up, evaluating and processing the loan application.