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Andy Ross Group presents the CODI (COST OF DEPOSIT INDEX) Mortgage
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When you are planning to purchase a home, certain priorities remain
at the forefront – security, comfort, style, financial considerations,
and the ability to control them all. Beyond the beauty of the physical structure,
a home is a framework within which you can use your imagination to build a
unique lifestyle and create wonderful memories. A home is a place where
you can shape your dreams into realities.
Professionals and business people who understand the value of controlling
their own funds – and controlling their financial futures – have long used the product.
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We are professional mortgage planners, we understand the options available to you,
and we are proud to present you with a comparison of mortgage products in order to
help determine the best mortgage for your needs. I (Andy Ross personally) have made
the CODI mortgage the mortgage on my own home, and I can attest to its advantages
firsthand. I would like to do the same for you.
A home is also a place where your financial expertise can guide these dreams.
Fortunately, you have options to consider when purchasing your home.
The CODI (Cost of Deposit Index) mortgage is an interest rate that is tied
to a stable, slow-moving index. Widely used, particularly in high value real
estate areas, it also has a lower overall cost than fixed rate loans and has
several attractive payment options. This is your future and your money, but
most of all this is your life, and this is your decision.
Mortgages, like homes, come in all shapes and sizes. Since choosing a mortgage is
among the most important financial decisions you will ever have to make, we Andy Ross Group
are pleased to present one of our most significant products, the Cost of Deposit Index, or
commonly known as the CODI, mortgage.
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THE CODI MORTGAGE IS PARTIALLY A FIXED RATE and partially subject to adjustment
based on an index called the certificate of deposit index (CODI). It is not like
a conventional adjustable rate mortgage (ARM), which is based on the U. S.
Treasury bond rate. The CODI index uses a rolling average for 3-month CD rates.
This index historically has been the most stable, not moving up and down as quickly
as other ARM indexes.
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WHAT DOES THIS MEAN FOR YOU, AND WHAT ARE the other important features of this mortgage
that make it so attractive? The first advantage is, of course, its lower rate. Moreover,
the CODI mortgage comes with a menu of payment options available to you on a monthly basis.
These options and what they can do for you are explained in more detail in this brochure.
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WHAT DOES THIS MEAN FOR YOU, AND WHAT ARE the other important features of this mortgage
that make it so attractive? The first advantage is, of course, its lower rate. Moreover,
the CODI mortgage comes with a menu of payment options available to you on a monthly basis.
These options and what they can do for you are explained in more detail in this brochure.
WHY TAKE THE TIME TO LEARN ABOUT A TYPE of mortgage that is so different from one with a fixed rate?
Simply put, a mortgage is a serious commitment, and you are wise to ask about a CODI mortgage.
It’s an educational process and an opportunity for you to do the right thing for you and
your family.
A CODI MORTGAGE WORKS FOR YOU RIGHT FROM the start. When purchasing a home, the rates give you
more buying power by keeping more money in your pocket. When refinancing your home you have
the same opportunities. This translates into the ability to build equity faster than in
traditional mortgages, thus reducing your debt and paying off your mortgage more quickly.
All the while, you are protected from large interest rate and payment changes.
WITH THE CODI MORTGAGE’S FLEXIBLE payment plans, you will have more control. Each month you
will receive a detailed statement of your mortgage account, giving you a choice of how much
you want to pay for your mortgage that month. This puts you in control of your financial future.
Thousands of people, including financial planners, accountants, and attorneys, have chosen this
mortgage for themselves.
FOLLOWING ARE THE FOUR CODI MORTGAGE MONTHLY payment options. Some people choose one or the
other; some use a combination of the choices throughout the year. More specific examples will
be found elsewhere in this brochure.
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OPTION ONE
Pay the full principal and interest monthly payment based on a 30-year amortization.
This is the method by which the majority of homeowners pay their mortgage whether it is
fixed or not. If you make this payment consistently for 30 years, you will be mortgage-free
at the end of that time.
OPTION TWO
Pay the full principal and interest monthly payment based on a 15-year amortization.
OPTION THREE
Pay monthly interest only. This option is a great tool for controlling exactly how
much principal you wish to pay toward your mortgage. By making an interest-only payment
your previous month’s principal balance will remain unchanged. If you wish to make
principal reductions on a monthly, quarterly or even annual basis the choice is yours.
This is a particularly attractive payment option for self-employed people or for others
whose income may fluctuate or depend on end-of-year bonuses.
OPTION FOUR
Pay the minimum monthly payment due. Many people choose this option in order to
substantially reduce their monthly payment, thereby increasing cash flow to be used
for other purposes. For example, you may want to fund a tax-free college education
fund, you may have a retirement plan at work that is not fully funded, or you may
simply need the lower payment option until your income catches up with your cost of
living. Regardless of the reason you choose to make the minimum payment and defer some
of the interest, you have the choice and control on a monthly basis.
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AS YOU CAN SEE, THE CHOICE OF HOW TO USE your money is strictly up to you. Contained in
this brochure are several examples and actual case studies of homeowners who have chosen
the different monthly payment options.
THE CODI MORTGAGE RATE IS DERIVED IN TWO ways: from the margin and from the index. The
margin is fixed for the life of your loan. The index is the percentage over the base
index that you will be charged. This is why the CODI mortgage is called a hybrid produce –
because part of the fully indexed rate is fixed and part is adjustable. As an example, if
your fully indexed rate is six percent, and of that three percent is the fixed margin and
three percent the index, you can see that fifty percent of the rate is fixed at all times
and fifty percent of the rate is subject to an adjustment.
This adjustable part of your mortgage is based, as stated earlier, on the cost of deposit
index of the 12-month average rate of 3-month certificates of deposit; the Federal Reserve
publishes this rate monthly. Historically low, it is easy to see why using this index makes
a lot of sense. Since the CODI index is based on a rolling 3-month average of these rates,
this means that you can actually predict closely what your rate is going to be in the future
by looking back at previous years’ data.
THE CODI MORTGAGE IS NOT A NEW PRODUCT. The Federal Reserve has reported this index since 1966.
Fed Reserve Rates.
Professionals and business people who understand the value of controlling their own
funds – and controlling their financial futures – have long used the product.
We are professional mortgage planners, we understand the options available to you,
and we are proud to present you with a comparison of mortgage products in order to
help determine the best mortgage for your needs.
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