When you lock a rate, your lender is guaranteeing you that rate for a specific amount of time, whether rates go up or down, you get the rate agreed upon at the time of locking. However, market rates can change daily, and rates could go down while your house is being built.
With a float down option, your rate is still locked, however, if rates go lower by a certain percentage you will receive the lower rate without risk of your rate increasing. Since building a home could take 9 months or longer, this option gives you peace of mind that you are getting the lowest interest rate, without having to risk if rates go up.
The float down options remains in effect even if the construction period is extended and is available on most GO Mortgage Single Close Construction loans. This gives you the opportunity to have a lower rate after your home is complete if the market has dropped.
Float down option allows you to feel confident you are getting the best rate and lowers your monthly payment to save money. Interested in learning more about Single Close Construction loans with a float down option, speak with a home loan advisor at GO Mortgage.