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Rate Lock / Float Down

I am in the process of refinancing my former primary residence, which is now rented.
We have an approval, and apparently our rate was locked about a week or two ago at 3.75 % - 75% LTV. I called to ask about what rates were available because I saw that rates had dropped quite a bit in the last few weeks. The person I spoke to at the mortgage company said that once a rate is locked it has to drop by a certain margin or else it can't be changed.

They did not tell me what that margin is, and I plan on asking them, but this sounded like BS to me? I wanted to check in here before asking any more questions to the lender.
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October 01 2012 - US
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Answers (4)

I discuss what are the options to the borrower before locking. There is nothing you would sign. The way a float down works with us is if you decide to go with a float down we will secure it with a credit card to ensure our ending investor the loan would be closing and they would be getting the loan. If for some reason there was no issues and the loan was in an approved status and the loan would close with no issues but the borrower decided to walk we would charge that credit card. How far are you in the process? Shop the loan around.
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October 01 2012
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They sent me a rate lock form, however, I have no record of signing it.
I do not believe I signed a float down agreement, but again I don't believe I signed anything regarding the lock.

I mentioned that I did not recall signing the form to lock in the rate, and they just stated that it had already been locked?
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October 01 2012
Policy varies greatly by lender.   A minimum decrease amount is not unusual to allow a float-down.

It is best to ask these types of questions before you request to lock in your terms.
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October 01 2012
Did you sign a float down form and give them a credit card number?
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October 01 2012
 
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