Resources > Glossary > Float Down Option

Glossary of Notary Public, Mortgage, Signing Agent, and Loan Signing Terms.

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Common Terms 1   Common Terms 2

Float Down Option

Function: noun

Definition 1:
One variation of a float down option is an option to choose a lower rate within 30 days before the closing of your loan and "float down" to a lower rate than the previously locked-in rate. This allows you to pick the best rate within that time period. Another type of float down allows you to get a lower rate during the term of the mortgage. Since float downs have some attractive features for the borrower that could be very expensive for the lender, float down options require paying extra points during the origination of the loan.