Posted on: 11th Aug, 2007 09:19 pm
Is it possible to have a a COSI Mortgage loan with the 7/5% iinease the first four years and then a balloon payment due in the 5th year where Bank calls in theloan?
Hi Lady,
The Cost of Saving Index (COSI) gives the borrower a sufficient amount of cash for the first five years of home ownership. Though the Cost of Savings Index is difficult to track but it is the least changeable. It means that this type of index changes rarely. The COSI index is calculated after doing an average with the previous 1 year and thus creates a very constant index. So, it is quite likely that the COSI loan will not end up demanding a balloon payment at the end of the loan term.
The Cost of Saving Index (COSI) gives the borrower a sufficient amount of cash for the first five years of home ownership. Though the Cost of Savings Index is difficult to track but it is the least changeable. It means that this type of index changes rarely. The COSI index is calculated after doing an average with the previous 1 year and thus creates a very constant index. So, it is quite likely that the COSI loan will not end up demanding a balloon payment at the end of the loan term.
If you had opted for a balloon payment mortgage then it is possible that lender will ask for the balloon payment at the end of 5 year term. Normally balloon payments become due at the end of 3, 5 or 15 years. Your loan must be having a balloon payment requirement after 5 years.
Read more about balloon mortgage payments from here - http://www.mortgagefit.com/discuss/balloon-payment.html
Read more about balloon mortgage payments from here - http://www.mortgagefit.com/discuss/balloon-payment.html
"Is it possible to have a a COSI Mortgage loan with the 7/5% iinease the first four years "
COSI is known to be stable index. How is it that there is 5-7% increase in the rate in first 4 years? Give some details about your loan so that we can say what is actually happening.
COSI is known to be stable index. How is it that there is 5-7% increase in the rate in first 4 years? Give some details about your loan so that we can say what is actually happening.