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Get a Mortgage From… Costco?

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    Jay Smith, Costco director of Business & Financial Services, on Costco’s new home mortgage program.

  • Duration 5:11
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This transcript is automatically generated

You can -- let's.

But now members can also get a home mortgage here to explain.

-- thanks for album -- -- tonight we're fascinated by your program tell us how works.

Sure thanks for having me Jerry well it costs that we launched cost of finance dot com for mortgage services it's been.

A great experience for that -- is a member can.

Go online and they can go to Costco dot com and click on services they can see that.

The different services that we offer we -- about twenty different services actually one of those is is mortgage on the mortgage service they can.

Go in in -- limited information it's it's different that way where they don't have to put in Social Security number and other you know.

Very personal information.

And they can still see the rates.

They -- -- rates that the lenders are offering.

And then note to initiate another -- -- here but you're really an intermediary.

You're seeing between the consumer and then a bunch of lenders out there your website is helping put the two together.

So that at the end of the -- the consumers really picking one of many lenders why is this a good business for you.

Sure -- get any and a little I guess -- just a little different is that.

Yeah we invent those lenders very closely we offered you know this program through just a select group of lenders where we pre negotiated.

The value -- members that we we've been -- to every lender on the platform to make sure they understand.

The value of membership.

And the reason it's always good for us in to offer services and and products that have value.

Is that it enhances the value membership and that's what we're about I think that's breaks that site different.

That's what makes Scotland and what is the network let's put some dollar figures on -- -- a look after -- number you know I've got -- -- toilet Paper in my basement -- Coke the entire neighborhood.

But.

-- we say value to members let me tell you when you're buying a mortgage there's only one value and that's the loan rate and well also the feature pay.

Are you discounting any of this for -- that's what we've got a -- yeah premier brand.

Yeah that's right.

And we get that that's where we're not trying to offer you know hundred financial services just those where we can do exactly what you said Jerry.

We are offering.

The the lender fees at a cap rate of 600 dollars for executive -- 750 dollars for non executive members that.

Alone is a tremendous value plus the rates.

You -- -- lower way it's.

That's absolutely so they get a little -- rate and they might get if they work borrowing from the same lender outside of your system.

That absolutely that's that's the value of membership is it the member can go outside of their membership and get the same value then really we shouldn't be offering that service so it's very important to us that.

And not only do they get the best rates and fees but a great experience so we aren't very.

Very committed to that -- Well and of course as you said before you offer lots of other financial products -- -- -- lots of other things that you get it costs go if you're a member.

I'm wondering if you're curious about why yeah I know you want to promote the value of the membership yes but getting into the financial arena.

Given what's gone on in the banking sector -- it's surprising to me that you would make this choice why the.

Financial arena.

You know I I think that we deal is as you know -- we -- with a -- at different demographic we have a member who is.

You know is likes to buy fine lines -- the number one fine wine importer in.

In the US and they they shop and spend -- more than maybe the average consumer so they have a different.

Credit score they have a higher.

Higher likelihood to qualify for financial products so.

-- that.

It's really all that the member of the member.

Because of their demographic and they can get a greater value.

And more qualified for that the financial services that we offer in there and -- -- looking at for those services from us.

Are you finding that your members are asking for more financial services in the wake of -- sort of bank meltdown.

I know a lot of people out there looking for options they're frustrated by what's out there they don't like the fees they see in the broader consumer marketplace.

-- you've just responding to.

You know.

Requests for service for members.

Yet.

You know -- -- the member you know when it comes to products you know our our president is is said you know the member votes that.

At the register item what they want with the financial services.

You know we see the response in NA tests that we test every service and -- there's a great response we.

Roll that out nationally in.

It really starts -- that that criteria.

Can we do alert deliver great service experience can we provide the best possible value.

In the service and then we're going -- Do that because that's consistent with a program.

-- your next banker may be a warehouse club that's the moral -- story.

And Jerry again members can go to Costco finance dot com and they're interested -- -- -- -- easiest find.

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