Cost of Funds Index (COFI)

This is a monthly cost-of-funds index (COFI) reflecting the weighted-average interest rate paid by a particular Federal Home Loan Bank District savings institution on savings and checking accounts. The 11th District is the one most commonly used, which covers Arizona, California, and Nevada. The COFI index is published on the last day of the month and reflects the cost of funds for the prior month. COFI usually lags behind market interest rates in both up and down markets, which means that loans tied to this index rise and fall more slowly than interest rates in general.

Summary:
The COFI is a stable index that is still available but is not used as widely as it once was due to the massive consolidation in the S&L industry over the past decade. With fewer and fewer S&Ls the bottom line costs of the big ones that are left are lower and more stable, which does not bode well for an investor in an upward or volatile market. Since a consistently higher margin is tied to this product it will be less attractive for your customer.

Ideally Suited for:
This index is ideally suited for a niche borrower with some qualifying challenges who are comfortable with a slightly higher effective rate. Great for a stable to rising interest rate environment.

If you would like to apply for a Delaware Home Loan, you can APPLY ONLINE HERE, you can call John R. Thomas at 302-703-0727.

John R. Thomas – NMLS 38783

Certified Mortgage Planner – Primary Residential Mortgage, Inc.

302-703-0727 DE Office / 610-906-3109 PA Office / 410-412-3319 MD Office

248 E Chestnut Hill Rd, Newark, DE 19713