Clients often ask me what happens if they lock in an interest rate and then rates lower.

Well, float down policies vary from lender to lender, whether it costs more in the upfront rate you’re able to lock, or there’s a float-down fee assessed. Guardian Mortgage is no different.

“You need to be comfortable with the rate you lock down because that’s almost always the rate that you’ll close with.”

Float-downs occur when there are major movements in the interest rate market, and because most closings take around 30 days, there’s not usually a big enough window for massive movements in interest rates to occur. For all intents and purposes, you need to be comfortable with the rate you lock down because that’s almost always the rate that you’ll close with.

So, in answer to the question of how locked one’s rate is—it’s locked pretty tight, with some small exceptions. Speak with your lender upfront about this, not late in the game; it can become very challenging to make changes if rates drop at the last second. In the lending world, “the last second” is usually within 15 days of closing.

If you’d like to discuss this in more detail, feel free to reach out to me. I’d be happy to speak with you.