What does it mean to lock in a mortgage interest rate and float down.?

what does locking in a mortgage rate mean

I thought that if I had a 30 year conventional mortgage loan with a 6% fixed interest rate, then my interest rate would stay at 6% for the 30 years? I think im wrong because I see stuff like a 60 day rate lock at the time of application. What does that mean? Does it mean that you can have 60 days to choose the. show more I thought that if I had a 30 year conventional mortgage loan with a 6% fixed interest rate, then my interest rate would stay at 6% for the 30 years?

I think im wrong because I see stuff like a 60 day rate lock at the time of application. What does that mean? Does it mean that you can have 60 days to choose the best interest rate for you to lock in for the 30 years?

I thought if it was a fixed rate then it would stay at the same rate until the end of the loan.

How is "float down" on a rate used? Is that only for adjustable rates? Does it mean that if a rate is lower than you can lock in on that?

What does points mean? Is that just meaning like a rate of 5.5 moved up one point to 5.6?

Heres a example I read where they talk about points "In terms of a 60 day or 90 day lock, usually the cost for a 90 day lock is relatively small. The small price

paid for a lock-in will more than offset the cost of a higher interest rate or possibly not qualifying for the loan. For example, the typical charge is an additional 1/4 POINT for a 90 day rate lock.

Update: So if i locked in a 6% interest rate for 90 days at a fixed rate, then I would only get a 6 % rate for 3 months of mortgage payments, and then i have to lock in another rate for 90 days for 30 years?

Or can I just lock in a 6% interest rate for 30 years?

Update 2: Sorry I still dont understand "Points". I also dont understand you used a example of a " interest rate is 4.75 fixed but the APR 4.874 %" Im confused and now im thinking i have to pay 4.75 interest per month plus 4.874 every year. I need to learn how to read the sheet you hyperlinked. Im 22 and have $25,000 for. show more Sorry I still dont understand "Points". I also dont understand you used a example of a " interest rate is 4.75 fixed but the APR 4.874 %" Im confused and now im thinking i have to pay 4.75 interest per month plus 4.874 every year.

I need to learn how to read the sheet you hyperlinked. Im 22 and have $25,000 for a 100,000 home with a credit score of about 735 and trying to learn more about the mortgage terminology before i get a loan

Source: answers.yahoo.com

Category: Credit

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