Float down
Definition
A rate lock, plus an option to reduce the rate if market interest rates decline during the lock period. Also called a cap. A float-down costs the borrower more than a lock because it is more costly to the lender. Float-downs vary widely in terms of how often the borrower can exercise (usually only once), and exactly when the borrower can exercise. See What Is a Float-Down? Do not confuse with interest rate increase caps and payment increase caps.
Related Terms Other terms related to 'Float down' starting with the letter 'F' First mortgage, Foreclosure, FICO Score, Fully amortizing payment, Fixed rate mortgage FRM Browse by Letter » 1 4 A B C D E F G H I J L M N O P Q R S T U V W Y | 