What does COFI stand for in mortgages?

cost of funds index
A COFI mortgage is a type of mortgage on which interest is calculated based on the cost of funds index, or COFI. These mortgages have variable rates, like adjustable-rate mortgages (ARMs), as the index rate goes up or down each month.

What is a COFI ARM?

Share. COFI (pronounced coffee) stands for Cost of Funds Index. Such an index is used with certain types of adjustable-rate mortgages (ARMs) to provide a basis for how the interest rate on those loans is periodically changed to reflect current market conditions.

Is COFI going away?

On January 31, 2022, the Federal Home Loan Bank of San Francisco will cease publishing the 11th District Monthly Weighted Average Cost of Funds Index (COFI).

What is the current COFI rate?

Posted on May 20, 2022; Latest data is 0.963% for April 2022.

What will replace COFI?

Freddie Mac today announced that we anticipate the replacement index for COFI will be a new index administered by Freddie Mac.

WHO IS COFI?

The 11th District Cost of Funds Index (COFI) is a monthly weighted average of the interest rates paid on checking and savings accounts offered by financial institutions operating in Arizona, California, and Nevada.

Can a qualified mortgage have a balloon payment?

A balloon payment isn’t allowed in a type of loan called a Qualified Mortgage, with some limited exceptions. Tip: A mortgage with a balloon payment can be risky because you owe a larger payment at the end of the loan.

What is SOFR mortgage?

The Secured Overnight Financing Rate (SOFR), is based on actual transactions in the Treasury repurchase (repo) market, where extensive trading happens daily. This is the market where investors offer borrowers overnight loans backed by their U.S. Treasury bond assets.

What is 11th District COFI?

What is the name of the index that lenders will have to start using in January 2022?

Enterprise 11th District COFI Replacement Index
The new index, the Enterprise 11th District COFI Replacement Index (“Ent 11th COFI Repl”), will be published here on the last business day of every month beginning on February 28, 2022 (for the month of January 2022).

What is the meaning of cost of funds index?

A cost of funds index or COFI is a regional average of interest expenses incurred by financial institutions, which in turn is used as a base for calculating variable rate loans. The interest rate on an adjustable rate mortgage, for example, is often linked to a regional COFI specified in the particular loan documents.

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