Win The Mortgage Rate Lock Game

Phoenix Mortgage Rates

One of the most critical components to structuring an Arizona Mortgage Plan when purchasing a home or refinancing an existing mortgage is interest rate.   As Arizona mortgage rates continue to move daily, putting together a strategic and effective game plan with your loan officer to capture the lowest rate is vital.

Secure the Lowest the Lowest Mortgage Rate

The challenge mortgage applicants face with regard to locking looks like this – If mortgage rates look good today and we lock in what happens if they get better tomorrow?  More importantly – What is we hedge our bets and hold off on locking our mortgage rate until tomorrow on a hunch hoping rates get better and they end up going up?  At the end of the day, a borrower ends up feeling just like they are sitting in a Vegas casino when deciding when to lock.   Locking in at the lowest Arizona mortgage interest rate on their new home loan becomes an educated guess which can put a borrower on the wrong side of the rate market increasing the cost of their new FHA, VA, Conventional, JUMBO or USDA home loan.

As your Arizona Mortgage Lender I want to share some great news!   There is a better way to lock in your mortgage rate and keep your sanity while doing it.  Our FLOAT DOWN lock program is here to save the day.  Utilizing a FLOAT DOWN lock gives a borrower the double protection they deserve.  With our FLOAT DOWN, our clients can lock in right away protecting against future rate increases AND we can lower their mortgage rate if and when Arizona mortgage rates go down before closing (even after we have locked in).  On a traditional/non-float down lock once a client is locked they are stuck even if rates improve.

How Does the Float Down Rate Lock Work?

Sound to good to be true?   Here is how our FLOAT DOWN works.

1. We lock a borrower’s interest rate in and select the FLOAT DOWN feature when locking
2. Borrower signs a FLOAT DOWN agreement and returns it to my team within 48 hours of rate lock (see below for more on this)
3. The maximum we can float a rate own is .375% from the originally locked mortgage rate (for example if original rate is 4.375% the lowest we can FLOAT
DOWN is 4.0%)
4. We can exercise the FLOAT DOWN option 1 time
5. If and when we execute the FLOAT DOWN and lower the borrower’s rate we must close within 20 days of the FLOAT DOWN execution

It is that simple!  Now, you may be saying wait a minute what is this “float down agreement” all about?  Fair question.  Lets dive in:

The FLOAT DOWN agreement states that the borrower is opting in to our FLOAT DOWN program and that they are aware of the terms associated with it.  In addition to items #3, #4 and #5 from above, the agreement also states that the borrower will be obligated to pay an amount equal to .5% of their loan amount if and only if they cancel their loan with my team.  There is no bait and switch here.  We do this to protect our financial interests.  The FLOAT DOWN  does cost our company.  If a borrower opts in to the program and then later cancels their loan we are left holding the bag.  We need cover ourselves in the event that we pay the costs associated with the float when we do not have a loan to close.  If we do close a mortgage there is no cost whatsoever to the borrower.  We cover the cost out of the revenue we generate from closing a loan.  We are honored to offer the FLOAT DOWN to our valuable clients as just one of the many benefits of selecting our team to serve you with your Phoenix mortgage needs.

What if the borrower does not cancel however their loan does not close due to circumstances beyond their control (low appraisal, seller issue leading to cancellation etc…)?  Easy – no cost is assessed for the FLOAT DOWN.  The only time a client is charged is if they decide to cancel.  Its simple, do not opt in to the FLOAT DOWN if you plan on canceling.

This program has proved to be a very effective strategy for every client that has opted in.  They do not pay anything for this benefit however they at a minimum eliminate the stress of having to pick the best singular moment to lock in.  At a maximum, they are provided with the free flexibility to lower their already locked in mortgage rate to a lower Arizona Mortgage rate if the market improves prior to their closing.

If you have any questions on how the FLOAT DOWN works please do not hesitate to call or email me!

By Jeremy House


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