3 On Your Side: Shopping For A Mortgage
By Jim Donovan
PHILADELPHIA (CBS) - Now on sale in aisle one, eggs, milk, bread, and a mortgage! With today's consumers feeling more comfortable shopping for financial products outside of a traditional bank, a growing number of retailers are stepping up their game.
3 On Your Side consumer reporter Jim Donovan has the details on what's in store for you the next time you shop.
First time homeowner Lilly Neubauer is always looking for ways to save dough.
"At the beginning of this year we were seeing historically low interest rates and we had heard that refinance was a great option," said Lilly Neubauer
So she headed to Costco, where she picked up groceries, home insurance, and a mortgage!
"We were really surprised," said Neubauer.
Think of it as the next generation of one-stop shopping.
A growing number of retailers, including Costco, Walmart, Sam's Club, and Home Depot are going beyond the basic store credit card, offering deals on financial services too.
"Mortgages, home equity loans, home improvement loans, life insurance," said Tom Feltner with the Consumer Federation of America.
Even home and auto insurance, depending on the store.
Feltner says with nearly 10 million U.S households without bank accounts, and credit from conventional lenders tight, these retail services may offer a sense of comfort.
"Consumers are drawn to the simplicity of a transaction that in previous products, there was much more of a barrier to entry," said Feltner.
Sam's Club's small business loan program is devoted to customers who do not qualify for traditional bank loans.
"We've had over 1,000 members qualify. The average loan size is around $11,000, /// hard out," said Catherine Corely with Sam's Club.
At Home Depot, personal project loans are offered up to $40,000.
"We have a lot of people that come in and want to do kitchen remodels, need a new roof, need a new bathroom. The project loan allows them the opportunity to finance that project," said Brandon Hayes with Home Depot.
And Walmart is testing out pre-paid, Metlife insurance cards.
No matter which store you chose, remember, shop around. Read all terms and conditions carefully. And don't forget to compare things like premiums, interest rates, closing costs, and general fees.
It's important to realize that retailers are partnering with financial institutions and insurance brokers to offer these deals. That means when it comes to things like mortgages and home equity loans, you'll still be putting your house up as collateral.
