Free Float Down & Free Lock and Drop Gimmicks
*NO SUCH THING AS A "FREE FLOAT DOWN" OR A FREE "LOCK AND DROP"... These are both advertising gimmicks that try to lure consumer business.
Once you have locked your loan to secure an interest rate, loan program and pricing, then we have committed to a lender the actual delivery and closing of your loan withing a 30 day period. NOTE: Now the clock starts ticking.
You are switched in case interest rates increase.
If interest rates drop??? again, there is no such thing as a "free float down" or "free lock & drop". Basically, if rates drop significantly and you (the borrower) chooses to want the much lower rate, then we (the agent) must pull your loan file from the initial lender and resubmit your loan file to a different lender with the then Lower Rate. The underwriting process begins again with the new lender. The time frame of underwriting, meeting of conditions, loan documents, signing, and funding all start over again.
*NO SUCH THING of an email rate lock. If a lender has not obtained a loan application which includes subjects address, Borrowers names and socail security numbers and proposed loan unit, THEN A RATE HAS NOT BEEN LOCKED AND CANNOT BE LOCKED. A typical email stating your rate is locked and that you must "APPLY" within 5-Days IS A GIMMICK. A rate cannot be locked for a Borrower without required information... and a typical correspondence email is NO guarantee that a rate is locked. A rate lock confirmation is officially given from Lender ----> Broker and in some cases takes anywhere from a few seconds to 24 Hours to Confirm.