(1888PressRelease)
March 13, 2006 -
Question: My husband and I are divorcing. I want to be able to keep the house. I have been offered a COSI loan by a lender? Should I go for it and save the property from being sold? Right now it is a fixed APR at 4.87. The COSI is about 2% and I understand will never rise more than 7.5% of the monthly payment-Right?
Answer:
As you know that, COSI index will never go beyond 7.5% so I think it will be a good option to opt for COSI Loan
Federally insured depository institutions under the Golden West Financial Corporation charge various interest rates on checking accounts, savings accounts and certificates of deposits. The weighted average of these interest rates is the COSI Index or the Cost of Savings Index.
The COSI Index does not fluctuate as often as other indexes tied to adjustable rate mortgages. This index determines the rates on COSI loans. The COSI Indexed rate is determined on the final day of each month. The rate is usually announced on the or near the last business day prior to the 15th day of the following calendar month.
The ARMs linked with COSI Index have lifetime interest rate cap of 12% or so. But there is no periodic interest rate cap thereby leading to negative amortization. Among all adjustable rate mortgages, the Option ARMs widely use the COSI Index for deciding upon the rates.
COSI Indexed ARMs have minimum payment change caps as well as lifetime interest rate caps. But these do not have periodic interest rate caps, due to which there is a possibility of negative amortization.
Cost of savings index is considered as one of the most stable ARM indexes in the industry. It is also one of the most widely used Option ARM linked indexes.
Mortgage Mentor will clarify and answer all your doubts and mortgage related questions. You can also take help of our glossary and mortgage calculators to know about the entire mortgage related terms and necessary calculations that needs to be done before taking a mortgage.
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