Cost of Savings Index, COSI Mortgage, COSI REFINANCE = Is the COSI right for me?

This unique home loan is based on the most stable lending index in America, the COSI (cost of savings index). The index is the only variable aspect of this adjustable rate mortgage. This is why the index so important. The COSI index has remained low and stable because, it is not based on the fluctuating economy. The COSI index represents the average of interest rates certain banks pay to common customers on checking, savings and CD accounts! If you have checked your bank statements lately those rates are still depressing. The economic recovery is under way in year 2000. Have you noticed your bank increasing the rates they pay you on your accounts? This means the COSI Index and the loans based on the COSI Index adjust only slightly over a long period of time. A fixed margin is added to the COSI Index to determine the fully indexed rate. It often takes 3-4 years for this adjustable rate product to reach the fully indexed rate. Click to learn the many other ADVANTAGES that most lenders just don't offer.

WHY IS COSI SO STABLE?

* After the massive savings & loan bailout in the late 1980's, the banks have changed the way they earn profits. Banks now earn bigger profits from bank fees rather than the lending they do with depositor assets. Banks are avoiding many lending outlets due to risk. That means they no longer need our money to lend out! SEE CHART.

* There is much less competition among banks today. Ten years ago there were over 1750 banks in America. Today there are less than 430 and the number is dropping.

* Consumers use checking and savings account for only convenient and necessary reasons. Over 40% of the index average are made of this type of account, and they are the most costly for the bank to maintain. Banks will always pay less for convenient and necessary accounts.

* Certificates of Deposit Accounts (CD'S) make up the other 60% of the COSI index. Although banks generally offer their highest rates on CD's. They also serve as an index stabilizer. During an economic recovery CD's rates will improve slightly. However billions of dollars of CD's were locked in during a sluggish economy when the stock market is most volatile. With a strong economy money market and stock funds become a more attractive investment.

* Although CD rates have recently increased the index has not gone up proportionately. This is due to old 7 year and 10 year CD'S that are reaching maturity at 7.5 to 10 % and are shifting into new low rate accounts, or are leaving the index all together.

* Have you noticed your bank no longer gives you a toaster when you open a new Account? Today you are lucky to get an oven mitt! This shows without a doubt that banks no longer value our large deposits. If banks are no longer competing for our business, they will no longer pay us high rates to attract our money.

Cost of Savings Index