Eloan Information Blog

A COSI Mortgage is a mortgage on which a rate of interest is charged based upon an index known as the Cost of Savings Index.

One of the largest Savings and Loans in the 11th District (CA, AZ, NV) offers a mortgage program tied to its own "cost of savings." Simply put, this Lender borrows money from consumers in the form of deposits, i.e. C/D's, checking and savings accounts, and then lends the money out as home mortgages. Then they place a fixed "Margin" on top of their own Index.

The interest rates in effect on these deposits are the basis for the COSI. The COSI is not based on actual interest paid on deposit accounts, but rather on a weighted annualized rate of all interest rates in effect on deposit accounts as of the last day of each month.

Mortgages:

Some people can’t wait to get rid of their mortgage. So they add extra money to their payment every month. The faster the loan is reduced, the less total interest is owed to the bank. But what’s the hurry? If you’re young or middle-aged, it’s far more important to put the maximum into your retirement plan at work. If you work for yourself put the into a Keogh or SEP-IRA plan. With a house plus financial investments, you’re better diversified.

During the past 30 years, the Standard & Poor’s 500 have earned an average of nearly 14 percent annually, according to Ibbotson Associates in Chicago. Long-term investors have a good shot at earning more money in their stock-owning mutual funds than they can save by paying their mortgages ahead of time. You might have a change of heart, however, when you retire. At that point, your monthly income will probably drop, making a mortgage harder to carry. At that point you can use some of your investment gains to pay off the bank.

Home equity:

How about borrowing against your house to invest in stocks? A home-equity loan is a second mortgage that you can tap at will for anything you want. At this writing, home-equity loans cost anywhere from 8 percent to 12 percent, depending on the lender. Those are variable rates, so they might rise. The more your loan costs, the greater the change that you won’t earn enough in stocks to make the risk worthwhile.

Best advice: Save your home-equity borrowing for other things—for example, home improvements, major home repairs, or college tuition (the interest is deductible if you itemize on your return). You might also use a home-equity loan to pay off higher-cost credit card debt — but only if you truly intend to control your spending. Do not borrow against your home to consolidate your debt if you’re likely to run up your credit cards all over again.

Labels: borrow, maximum, Mortgages, proceeds

They advertise relentlessly on the Internet, radio and elsewhere.
"Refinance your mortgage today! Save thousands of $$ No hidden costs, just great rates! Zero: That's your cost for refinancing!"
In recent months, a growing number of mortgage lenders and brokers have been hawking "no-cost" mortgages, in which the lender picks up the expenses that normally would be paid by the borrower.
And they're popular. Many borrowers see the mortgages as a convenient way to take advantage of falling interest rates while keeping more cash in their bank accounts. The pitch sounds great. Borrowers who get approved for these mortgages can avoid paying an assortment of fees, including legal, appraisal and origination, associated with a mortgage. For a $100,000 mortgage, such costs can range from $3,000 to $5,000.
But that's not the whole picture: Lenders who offer no-cost mortgages often make up for the lost fee income by charging higher interest rates.
For instance, Countrywide, one of the largest mortgage lenders in the country, adds three-quarters of a percentage point to its no-cost mortgages. Instead of paying 7 percent on a 30-year, fixed-rate mortgage, a borrower would pay 7.75 percent. That adds up to $18,400 in higher interest payments over the life of a 30-year $100,000 mortgage.

• "You can do the math," said Chuck Small, a financial adviser with ACH Investment Group, an investment advisory firm in Raleigh, N.C. "You'll be paying thousands of dollars more over the life of a mortgage."
  Still, no-cost mortgages make sense for borrowers who don't plan to stay in their homes for longer than four years, said Gordon Miller, president and founder of DNJ Mortgage, a firm that specializes in no-cost mortgages.
  For instance, a borrower who gets a $100,000 mortgage at a 7 percent annual interest rate will save $51.11 a month in interest payments compared with someone who gets the same mortgage (without fees) at 7.75 percent. That, in monthly savings, is attractive; but it would take 39 months, more than three years, to recoup $2,000 in fees associated with the conventional mortgage.
• 
  "For some people, especially those that are worried about losing their jobs, three years is an eternity," said Miller, who began doing no-cost loans 14 years ago. "They would rather keep more cash in their bank account and pay slightly higher (interest payments)."
  For people who already own a house, the no-cost option eliminates the fees associated with refinancing, in which one mortgage is replaced by another with a lower interest rate.
  Since July of 2000, mortgage rates have fallen more than a full percentage point, from 8.26 percent to 6.96 percent, on a 30-year, fixed-rate mortgage, according to Bankrate.com of North Palm Beach, Fla., which surveys the nation's largest lenders each week. Many homeowners want to take advantage of those falling rates without paying thousands of dollars in fees each time they refinance.
  "Theoretically, with a no-cost mortgage, you could refinance every time rates fall no matter how small the reduction (in interest rates)," said Randolph Straughan, a loan officer with First Financial, a Charlotte, N.C., mortgage broker.
  The growing popularity of no-cost mortgages is a major reason that Americans are on pace to refinance $1.07 trillion in mortgages this year -- a record, according to the Mortgage Bankers Association in Washington.
• 
  But borrowers should watch out for scams. Often, the companies who promise to waive fees for mortgages are really just rolling those fees into the cost of the mortgage, ACH Investment Group's Small said. The borrower may not realize this until closing, when he or she discovers that a 100,000 mortgage has increased to 103,000.
  A borrower who doesn't read the fine print can end up paying interest on those extra dollars over the full life of the mortgage.
  "Just remember," said Small, "that mortgage lenders aren't in this business for charity
  

Labels: debt, financial, investments, stock, tax-deductible

When you purchase ,, you are, in effect, purchasing a term life insurance policy whose benefit amount is the same as your morgage balance. That is a very important factor to remember: The death benefits of a morgage life policy will always be exactly equal to the remaining balance of the morgage. This means that after you've paid off half of your morgage, your insurance benefits will have also dropped by half. The premiums, however, are balanced over the entire term, and will not change.

• Why not Buy Term Insurance?

• Term insurance, which simply pays out the death benefits to your survivors, may indeed be the better choice. One reason to consider term life rather than morgage life insurance is that the death benefits do not decrease over time. If you are insured for $500,000 and have a morgage for the same amount, your survivors will receive that amount, and have the option to pay off the morgage, but may also invest the money instead, and use the interest to continue paying the mortage. Furthermore, if upon your death the morgage balance is only $300,000, the insurance policy will pay out $500,000, leaving your loved ones with $200,000 over the amount morgage life insurance would have paid out. Another advantage a term life policy offers is its relative stability when compared to morgage life. Most banks will require you to re-negotiate your insurance policy if the morgage is transferred to a different property or refinanced. Since you will be older at that point, your premiums will most likely be increased. A term life policy remains valid until the specified term runs out, provided you keep paying the premiums, which do not change for the length of the term.

  Morgage life insurance offers you the convenience of unified morgage and premium payments, but that convenience may come at a higher cost than you are willing to pay. Your bank will generally only have one insurance policy, which may not be ideal for your unique situation. An insurance broker, who can help you shop around for a policy, will have a much wider selection to offer you, increasing your chances of getting a better price. You can begin by requesting a free, no-obligation term life insurance quote, and our expert insurance agent will be happy to assist you.

Labels: 000expert insurance, insurance, morgage, morgage life insurance premiums$500, morgage payment

Main Points of Virgin Credit Card

• 0% balance transfers for 13 months (subject to 2.98% balance transfer fee, max £50 charge)
  0% on purchases for 3 months
  Earn 1 Virgin credit for every £1 you spend
  Discounts on your Virgin mobile bill
  Free purchase protection
  Protection against fraudulant use of your card
  Free travel accident insurance (not to be confused with travel insurance!)
  Typical APR 15.9% variable
• Our Assessement
• The Virgin credit card has been a market leader for over a year now and it's popularity shows no signs of waning. The introductory offers of 0% on balance transfers for 13 months* and also 0% on purchases for 3 months is one of the main attractions of the Virgin credit card. [*2.98% handling fee applies]

Labels: $$, balance, card, credit, fees, max, points, virgin