What Is Float-Down?
Float-Down: A rate lock option that lets you take a lower rate if market rates fall before closing.
A float-down is an option on some rate locks that lets you lower your locked rate once if market rates drop by a set amount before closing.
How it works
Terms vary. A lender might allow a float-down if rates improve by at least 0.25%, exercised once, within a certain number of days of closing. Some charge a fee upfront or when you use it.
Is it worth it?
It's insurance. It can pay off when rates are volatile and your closing is weeks away. If the fee is high or the trigger is large, a standard rate lock may be the better deal.
Good to know
Ask about float-down terms before you lock. Most lenders won't add one later.