Shane

What is a COFI Loan? What is the good, the bad and the ugly? I asked around work and nobody knows what they are nor have they heard of them. A good friend is looking into one and asked if I knew anything about them and I told him NO, but I have a resource for answers to ALL questions! So don't let me down Mitch Stellin, DJD, Wayneaviator, etc etc etc. Thanks in advance.

Shane

jdnca1

Never heard of a COFI mortgage...but have seen "COFI" securities, it stands for "cost of funds index" It's definately a floater program...probably similar to libor based programs.

Playn

Low initial rate, similar to an ARM with the typical low starter rate where your payment can only increase gradually (fixed for that year) BUT your interest rate increases based upon the index. The difference is tacked onto the loan so you could end up having more mortgage debt (negitive amoritazation)

Jonas

its a payment option arm. countrywide world savings etc do them and they are based o the cost of funds index,
good loan for retaining cash flow as start rates can be as low as 1%
gotta watch though as it can go neg am..
i have on some rentals as i am not planning on keeping for 15 or 30yrs to pay off anyway..
there are others like it too MTa , codi
currrntly i have a codi on rental mtg bal is 445k and min paymnt is 1700- slow moving index been at all time low...
its a great way to go..
bad is that alot of lenders wont lend behind one due to the possibility of it going negativly amortized basically your principal bal can rise if you make min pmt and rates go up//
there are also great programs on 3 and 5 yr fixed with interest only option....
check out both..

Shane

Thanks everyone. He says that the mortgage guy he has been talking to said that the rate can never go above 5.?%! I said that it sounds WAYYY to good to be true! I said why would the bank allow you to pay 1% in year 1, 2% in year 2, 3% in year 3, 4% in year 4 and 5.?% from there on out for the life of the loan? It just does not make economic sense. He is planning on stayingin this house for a long time. So it would clearly not make sense to re-fi this way given the expansion in the economy and the rising interest rate environment. Based on the aforementioned it would appear that the loan would quickly go into negative amoritization. Am I correct? Keep the info coming! Thanks again everyone! I KNEW OSO would not let down!

Jonas

another lier,, thats bs
tell him to find a lender /broker that will evaluate his situatuon and not blow smoke up his tail/// oh i hate that **** when the dont tell the real deal..
someone on oso prob does loans in his state..
check i do west coast mainly..

frequentflyer

[QUOTE=Jonas]its a payment option arm. countrywide world savings etc do them and they are based o the cost of funds index,
good loan for retaining cash flow as start rates can be as low as 1%
gotta watch though as it can go neg am..

Jonas hit it right on the head. Just look at the caps to make sure it can't go up to a ridiculous %. Don't rely on what you are told but rather read the terms. I've heard some guys say "It won't go over 5%" just because of the averages in the past few years but you never, never know so watch the caps. Hope this helps....

Shane

Do any of you guys do loans in NY? If so, and if the rates are worth it, I may re-fi myself. I am currently at 6.125% fixed for 30 yrs. Also, my buddy that I am asking for he may consider working with one of you guys as well.

Thanks and happy turkey day!

Audiofn

Shane 6.125 for fixed 30 is not bad at all. I have 6.25 and went to refi and the banks said it was not worth it.....

Jon

Shane

Jon,

Yeah, that's what some local banks told me as well. Have a great TURKEY DAY!

Shane