Posted: Mon Nov 14, 2005 3:03 pm Post subject: CODI Loans
I wasn tricked into a pick a payment CODI loan last year. After watching the rates tick up, I called World Savings and they gave me a 1 year fixed of 5.5%. But next year, I'll be back in my CODI loan. I called about a fixed rate loan, but was advised to keep my current fixed rate and get a COSI loan next year. Is that a smart move? Or should I bite the bullet (and the $6,300 prepayment penalty) and refinance now? My mortgage payment will go up by roughly $500 monthly
I would say that what you have decided previously was the best option. You should again ask for it.
Otherwise you may go for COSI which is a unique loan with the most stable index in America. These loans are very much stable and give you flexibility. You never lose control of your finances while going for a repayment.
Refinancing with additional closing costs can cost you a lot in the long run.
Hope I could satisfy your query.
Feel free to ask if you still have any more doubts.
Posted: Wed Nov 16, 2005 9:15 am Post subject: COSI vs. Fixed rate loan
The advice on COSI loans seems conflicting. You all are telling some people to take the COSI and others to get a fixed rate.
I'm hoping you can help me:
I have a CODI loan. World gave me a one year fixed rate of 5.5%, because the rate keeps rising. Next year, that will go back to a CODI. I could get a fixed rate loan at roughly 6.5% now, pay the 6,300 prepayment penalty and get it over with. But a World agent says to keep the 5.5% fixed until it ends next September and then get a COSI loan.
I can lay some of the benefits which you will get out of COSi loan, from first year payment rates are as low as 1.5% with flexible payment options. The COSI Loan has a lot to offer homeowners.
It is also very stable as far as the COSI Index goes as over the past 10yrs the changes in the index has been less than 3%.
I agree with Mant that you should continue with your fixed rate untill the period ends and then opt for a COSI. COSI has a stable index and you should not get worried with it.
So, in my opinion the latter option is a good one.
That is an interesting name but you should not get scared at any point of time. As your friend I shall suggest you to face the world as it comes to you and you will definitely find people eager to help you in your problems in some way or the other.
Manth, Blue and Niicss have suggested the same point and I fully agree with them as I have supported always COSI loan under similar circumstances earlier.
There are certain advantages of COSI loan -
1st. year payment starts as low as 1.5% to 3.25%
4 payments each month
reduced documentation available to 90% LTV
Full documentation purchase mortgages to 95% LTV
cash out to 90% LTV
These loans are fully assumable and the COSI index is very much stable with the variance recorded less than 3% over the last ten years.
So, you can opt for the second option and take a COSI after you finish with the current fixed rate term.
Posted: Wed Nov 16, 2005 10:51 am Post subject: COSI vs. Fixed rate loan
Thank you all for your help. I wasn't fully informed of what I was getting when I got the first CODI loan, so now anything other than a fixed rate loan does scare me a lot. I don't want to lose my house and as interest rates continue to rise I worry about what I'll face next year.
You all have been very rational and helpful. Thank you.
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Posted: Sun Nov 20, 2005 10:21 am Post subject: How good is the COSI loan for me
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 undersatand will never rise more than 7.5% of the monthly payment-Right?
Posted: Sun Nov 20, 2005 8:15 pm Post subject: RE:
Hi Urmi,
I think it will be a good option if you go for the COSI loan. This is because the Cost of Savings Index on which the rates of the COSI loan (which is an adjustable rate loan) depend, is one of the most stable indexes in the mortgage industry.
You also have the options of minimum payment change cap and lifetime interest rate cap which prevent increase in monthly payments to a large extent. There is no periodic rate cap and hence no chance of negative amortization also.
Hope that I have been able to help you. In case you have any other query, please feel free to contact us.
Posted: Thu Dec 08, 2005 12:03 am Post subject: Cosi
We currently have a Cosi loan biweekly and pay an additional $500/month on the loan. We have a cap of 7% increase yearly. Do you think with the rising interests rate we should roll over into a fixed rate? We are definitely going to be in our house for the duration. We took the Cosi to increase the loan amount so we could do rennovations. But with everyone talking about increased rate I am wondering what to do. The Cosi continues to increase the first 7years then payments decline. I would appreciate your thoughts.
Thank you for your time,
Pat
Posted: Thu Dec 08, 2005 12:43 am Post subject: RE:
Hi,
You are right Pat ARM rates have raised but just a little bit. And it is always better to have a fixed rate mortgage if you are planning to stay in your home for a long time.
At present though the rates of fixed rate mortgages are slightly down, still I would suggest you to wait for some more time. See how the rates turn up because if you convert your loan or refinance, there are different costs attached to it. And according to expert’s rates are not going to be sky high again.
Samantha
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