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Replies (13)
- Andrew Adams, "203K Specialist"
- Contributions:9349
Nothing!
Great example of a loan officer offering something they really don't have! The free float down has never really existed. The cost is usually hidden and truth be told the consumer has no idea what your current rates are so you can simply say our current rates are the same!
Great example of a loan officer offering something they really don't have! The free float down has never really existed. The cost is usually hidden and truth be told the consumer has no idea what your current rates are so you can simply say our current rates are the same!
- Norm D Plume, "America Needs Nixon!"
- Contributions:1663
rates today are at the pre-May 27 level for the first time since then.Whatever day in June you locked in, the rates are lower today.
- James Ryan, "GreatRateFolks"
- Contributions:1034
I have a bit more faith in my fellow man, however, there really is no such thing, and I always chuckle when I see it. I have several lenders that actually offer to me a "free float down" option, but it MUST be .375% better in rate, and it only goes to Fannie or Freddie 60 day price. Rarely can you get there from here, hence is why these lenders offer it. As is often the case, there is no such thing as a free lunch. I never mention I have this "option" to my clients with certain lenders because, as I said, the chances of it really resulting in a "free" float down is so small, I do not wish my clients opening threads over it, nor when that program is explained fully when they wish to exercize it, rating me poorly on Zillow...it just is not worth it to me.
Please do mention your experience in your rating of your loan officer. I am sure many of us have lost deals to him over this "free Float Down."
Please do mention your experience in your rating of your loan officer. I am sure many of us have lost deals to him over this "free Float Down."
- Andrew Adams, "203K Specialist"
- Contributions:9349
Even having to re-lock at the 60 day price when you are closing in 30 or 15 days is a cost...it's just hidden from the comsumer!
I don't share your faith in fellow loan officers....This industry is a mess and although LO's are not solely to blame...I have seen plenty that certainly share in the blame and should have a tough time sleeping nights. Unfortunately the ones that are to blame are sleeping better than most!
I don't share your faith in fellow loan officers....This industry is a mess and although LO's are not solely to blame...I have seen plenty that certainly share in the blame and should have a tough time sleeping nights. Unfortunately the ones that are to blame are sleeping better than most!
- Greg Darlin, "Greg Darlin"
- Contributions:3238
I get so sick of seeing lenders advertise, "Free Float Downs." The only lender that is offering it is Astoria Federal: great Arm Lender. And, most borrowers don't qualify for Astoira's super rigid LTV's and guidelines anyway. So, there is really no such thing as lowering the rate for free by guaranteeing it. It may be free to the borrower if market conditions are really good.
Most lenders who spew out that goop forget to tell the borrower the mechanics of a rate lock renegotiation and that the lower rate may not be at no cost to them.
Andrew, you are right: nothing is free. There is always a cost associated with lowering the rate for someone who has locked. Depending upon the ysp of the old rate, new rate and the amount the investor takes to lower the rate: typically shaving off .625 off the ysp of lower rate, then it can be at no cost to the borrower and still enabling the LO to make money. But, if the ysp on the lower rate is .625 and the investor take .625 off the top, what LO is going to lower the rate without having the borrower participate in the cost?
Most lenders who spew out that goop forget to tell the borrower the mechanics of a rate lock renegotiation and that the lower rate may not be at no cost to them.
Andrew, you are right: nothing is free. There is always a cost associated with lowering the rate for someone who has locked. Depending upon the ysp of the old rate, new rate and the amount the investor takes to lower the rate: typically shaving off .625 off the ysp of lower rate, then it can be at no cost to the borrower and still enabling the LO to make money. But, if the ysp on the lower rate is .625 and the investor take .625 off the top, what LO is going to lower the rate without having the borrower participate in the cost?
- Justin Sheftell, "Courtesy Mortgage"
- Contributions:3369
CAL STRS loans have a free float down....truly free. All locks are 45 days, one free float down, zero cost to borrower. No re-negotiating, only one rate is available each day. If it goes lower, you can float down.
As for conventional loan float down, it definitely can be offered to the consumer, market improves by greater than .75 points and the customer gets the lower rate.
I agree it is used mostly as an advertising gimmick, but it comes down to semantics if it is "free" or not. I think if a customer locks at 5.5 rate for example, and they close at 5.25 rate with same fee structure (not talking about lender flipping either)....that counts as free in my book.
As for conventional loan float down, it definitely can be offered to the consumer, market improves by greater than .75 points and the customer gets the lower rate.
I agree it is used mostly as an advertising gimmick, but it comes down to semantics if it is "free" or not. I think if a customer locks at 5.5 rate for example, and they close at 5.25 rate with same fee structure (not talking about lender flipping either)....that counts as free in my book.
- Ken Kopper
- Contributions:1578
Artie, do you mind sharing with us whether or not the lender was found on Zillow? I know I have seen quite a few quoting in VA that claim to have a "free float down". Best policy is always complete and total honesty regarding those types of guarantees.
My best investor offers a "rate renogotiation" policy where loan must be AWC or CTC and they allow to float down to today's 30 day price on a 15 day funding lock. Might be confusing to the borrower but if the policy is fully disclosed upfront there can never be any disappointment.
My best investor offers a "rate renogotiation" policy where loan must be AWC or CTC and they allow to float down to today's 30 day price on a 15 day funding lock. Might be confusing to the borrower but if the policy is fully disclosed upfront there can never be any disappointment.
- Justin Kennedy
- Contributions:692
cant really say all the above is true or false.
from my own experiance, i have had Pinncale capital offer free float down. which saved the client a full half in rate on a FHA streamline, this happened when the market fell end of month. at another lender, i have had a the opportunity to lower a rate by.125; i had to reduce my compensation a bit (.125%) but, in the end, the client was well rewarded. the lenders are compensated as well, since, 5/10 files would be pulled by the broker if rates improved by that much.
from my own experiance, i have had Pinncale capital offer free float down. which saved the client a full half in rate on a FHA streamline, this happened when the market fell end of month. at another lender, i have had a the opportunity to lower a rate by.125; i had to reduce my compensation a bit (.125%) but, in the end, the client was well rewarded. the lenders are compensated as well, since, 5/10 files would be pulled by the broker if rates improved by that much.
- Greg Darlin, "Greg Darlin"
- Contributions:3238
Ken,
Are you talking about Davido Jillo? :-)
Are you talking about Davido Jillo? :-)
- Ken Kopper
- Contributions:1578
Him and a few others quoting in MD and VA and then there a few others in PA which you don't even see as you dont quote there.
- Artie Fufkin
- Contributions:2
The lender was not found on Zillow.
- Norm D Plume, "America Needs Nixon!"
- Contributions:1663
You will sometimes see a true free floatdown on long term locks (i.e. 180 days+), usually has to be exercised 30 days from closing. A large advance deposit is often required for the long term locks.
- Steve Felty, "SteveFelty"
- Contributions:396
Obviously we don;t have the benefit of knowing your unique situation, but i don;t think i locked anyone over 5.5% last month, so i suspect your lender may operate using a higher rate than most of us do.
I think you should consider putting your loan info into a Zillow Mortgage request - I think you may be surprised at the quality of the lenders available to you and the rates and fees at which they can originate your loan.
I think you should consider putting your loan info into a Zillow Mortgage request - I think you may be surprised at the quality of the lenders available to you and the rates and fees at which they can originate your loan.
Getting lender to accept free float down
What can I do to get them to adjust?
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