Float-Down

Definition

When mortgage rates decline during the application process, allowing borrowers to lock in the lower rate. It's basically a free upgrade that lenders resist offering.

Example Usage

Rates dropped 75 basis points while our application was processing, so we got a float-down to the better rate.

Origin

Mortgage industry terminology from floating rate negotiations

Fun Fact

Float-downs save borrowers an average of $100-300 per month over a 30-year mortgage.

Source: Mortgage Bankers Association

Related Terms

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