Cofi loans - Posted by Natasha

Posted by Paul Macdonald on November 28, 2000 at 10:57:09:

You can reach me most days at 703-354-4024.

Cofi loans - Posted by Natasha

Posted by Natasha on November 18, 2000 at 09:53:05:

Can someone explain this type of loan and the benefits of it? Is this a good type of loan for investors to keep the highest amount of cash flow? What are the disadvantges? When should one use this type of loan?


Re: Cofi loans - Posted by Paul Macdonald

Posted by Paul Macdonald on November 21, 2000 at 09:06:23:

Cofi loans are in my opinion the absolute best mortgage available for cash flow management.
Plus’s -
They use the slowest moving index which insures your rate changes very slowly.
You have a low start rate. And while the rate adjusts quickly to fully indexed your payment adjusts annually and only 7.5%!! (That’s 7.5% of the payment, not an interest change of 7.5% - so a $100 PI will only go up to $107.50)
ARMS adjust based on two factors - your outstanding balance and the index movement. If you choose to prepay a piece of the principle since Cofi’s are almost always monthly adjustable (for rate, not payment) you get an immediate corresponding decrease in your payment.
You can choose to be neg-am or fully amortized.
And for the investor a huge benefit!!! Since the Cofi lender reports your minimum mandatory monthly payment (which is the neg-am number) to the credit bureau you show a VERY low monthly cost basis. From personal example - a 260k note has a $1200 and change reported PI. Fully indexed its closer to $2100 and change per month. So my qualifing income shows as $900 per month higher than it would with a Fannie/Freddie loan. Its a great loan.

Its the slowest moving ARM out there. So if Fannie/Freddie rates go down… your Cofi might take a year or two to realize it.
And if you choose to go neg-am for the duration, the two primary lenders that offer Cofi’s have the option to recast the note at year 5 or 10.

I have a Cofi. And I do mortgages for a living. They are great loans.

If you are going to use ARMS use Cofi’s or look alike products.

Good Luck.

Re: Cofi loans - Posted by JeneanNC

Posted by JeneanNC on November 28, 2000 at 09:46:42:

How do I reach you to discuss more?