Lenders may offer different options in establishing the interest rate and points that you
will be charged, such as:
Locked-In Interest Rate with Floating Points
- Your interest rate is locked but points may rise and fall (float) with changes in
market conditions.
- Even if you float your points, your lender may allow you to lock-in the points at some
time before settlement.
Pro
If you float your points and market rates decrease by the time of settlement, you'll benefit
by paying less in up front costs.
Con
If you float your points and market rates increase by the time of settlement, you may end up
paying more in up front costs.
This information is adapted from "A Consumer's Guide to Mortgage Lock-Ins" published
by the Federal Reserve Board and the Office of Thrift Supervision.