Cost of Funds Index (COFI)
The 11th District Cost of Funds is more prevalent in the West and the 1-Year Treasury Security is more prevalent in the East. Buyers prefer the slowly moving 11th District Cost of Funds and investors prefer the 1-Year Treasury Security.
 |
The monthly weighted average 11th District has been published by the Federal Home Loan Bank of San Francisco since August 1981. Currently more than one half of the savings institutions loans made in California are tied to the 11th District Cost of Funds (COFI) index.
The Federal Home Loan Bank's 11th District is comprised of saving institutions in Arizona, California and Nevada.
Few people who use and follow the 11th District Cost of Funds understand exactly how it is calculated, what it represents, how it moves and what factors affect it.
The predecessor to the 11th District Cost of Funds index was the District semiannual weighted average cost of funds published for a six month period ending in June and December. The San Francisco Bank was the first Federal Home Loan Bank to publish a monthly cost of funds index.
The funds used as a basis for the calculation of the 11th District Cost of Funds index are the liabilities at the District savings institutions: money on deposit at the institutions, money borrowed from a Federal Home Loan Bank (known as advances) and all other money borrowed. The interest paid on these types of funds is the cost of these funds.
The ratio of the dollar amount paid in interest during the month to the average dollar amount of the funds for that month constitutes the weighted average cost of funds ratio for that month.
The average cost of funds is said to be weighted because the three kinds of funds and their costs are added together before a ratio is computed rather than calculating averages individually for the three sources and using a simple average of the three ratios. This gives the greatest weight to the interest paid on deposits, and explains the delayed reaction of the index to rising fixed rate mortgages.
 |
<a href="http://www.summitcountymountainproperty.com/blog/"
target="_top"><b>Breckenridge Real Estate
Blog</b></a>
Search Breckenridge Real Estate News on Breckenridge Colorado homes with our Breckenridge Blog
For additional resources visit:
Send a Free Colorful Colorado Post Card
Search for Homes and Land in the Summit County MLS
Denver Real Estate
Breckenridge Colorado Real Estate
Aurora Colorado Real Estate
Colorado Homes for Rent Attention Landlords and Property Management Companies.... Post a Full WEB PAGE AD and POST up to 5 PHOTOS for FREE! of your Colorado investment property on one of the best resources on the internet for Colorado investors to find good quality tenants !
Search For FREE! "Use Your Mouse to Rent Your House" tm
Articles © Copyright 2005 by RealEstateColorado.net, Inc.
Top of Page
|
