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Float down?

We have locked a rate of 4.5 with Wells Fargo for a 30 year home mortgage. I think the rate may have dropped a little in the past week. Does anyone know if they offer a one time float down option?
  • January 19 2014 - Brooklyn
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Answers (9)

Not every lender allows the float down option, so you should call and check with your loan officer if that is allowed in your situation. This option will allow you to obtain the lower rate, but like I said, you need to call to see if Wells Fargo will allow that. If not, you still may have time to seek out other lenders for better rates and services. There are other great lenders outside of mainstream banks that can offer even better services. Well I hope this helps. If you have any further questions or if you would like a loan, feel free to contact me.

Good Luck!
  • January 20 2014
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Got it thank you sir for the FYI.
  • January 20 2014
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its a business decision each lender is free to make but its not derived from any statute. Some lenders will do it, some won't.
  • January 20 2014
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Norm, maybe I was mis-informed but once the rate is locked it can be unlocked to lower the rate before it expires? I apologize and don't want to give out bad information that's not my intention so please correct me for future use. I have never ran into this problem as a L/O just when I was a processor back in the day and that was what I was told. I use to work for one of the large lenders so that may have been the scare tactic they used on me as a processor to convey to the borrower.
  • January 20 2014
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Legally the only way they can "re-lock" your loan is if they cancel your current lan <sic> and start the process al <sic> over again however,
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I'd be interested to see the statute (US code or state code) that makes it illegal to re-lock a loan if it benefits the borrower. Would you mind posting the statute here so we can  all be enlightened?


As for whether lenders X, Y or Z will offer a relock isn't relevant; what's relevant is if Wells Fargo will do it; and as Barb said, ask Wells Fargo.
  • January 20 2014
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Some lenders do offer free 1 time float downs on rates, but a lot of time they also have restrictions as to what the rates need to move to in order for a float down.  For instance I have seen from one company advertisement (not my company i work for) of a free 1 time rate float down only if the interest rate goes down by a minimum of .375%, otherwise they will not float the lock down.

Let me know if that helps, but again there are very few places that will do that and if so they have restrictions as to how much the rate needs to drop.  You would definitely want to ask your loan officer, but I doubt that they would be able to assist you.
  • January 20 2014
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Legally the only way they can "re-lock" your loan is if they cancel your current lan and start the process al over again however, there is normally a 60-90 day waiting period before you can begin the process again with the large lenders. That is the purpose of locking in, in a market where the rates are going up, it is better to lock. Depending on your loan amount, one eigth or .125 percent of the decrease in the rate won't make that much of a difference. That's why I tell borrowers not to get to crazy with rate shopping especially since rates are on the rise and expected to be up to 5% by the end of the year or sooner. Floating a rate is very risky in general in this market so i always lock in with my borrowers if they are happy with the initial payment.

Good luck!

  • January 20 2014
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Probably not. Free float downs are not very common
  • January 20 2014
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Ask your loan officer whether they have a float down option. Since you locked with Wells Fargo, they would be the only appropriate source for this question.
  • January 19 2014
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