What is COFI ARM (Cost-of-Funds Index Adjustable Rate Mortgage)?


What a COFI ARM (Cost-of-Funds Index Adjustable Rate Mortgage) is - just another adjustable rate mortgage tied to the COFI index. There are several COFI indexes and the 11th District Cost Of Funds Index is the most well-known of them. Usually, when talking about COFI, lenders mean the 11th District Cost Of Funds Index.

Other COFI Indexes

The National Monthly Median Cost of Funds Index and the Federal Cost of Funds Index are the other COFI indexes. However, even though there are Cost-of-Funds Index Adjustable Rate Mortgage, tied to them, the COFI ARM is best known as the 11th District Cost Of Funds Index of California, Arizona and Nevada lending institutions.

The COFI ARM (Cost-of-Funds Index Adjustable Rate Mortgage) is simply an ARM mortgage, often recommended by lenders as a more stable and predictable mortgage instrument. Option COFI ARMs, as well as simpler ARMs based on COFI, share common features with other ARM loans. The only difference may come in the rate change - COFI doesn't always move along with other ARM indexes, following the market trends. When rates are rising, COFI ARMs provide greater protection to borrowers.

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