"Float down"

Another advantage of a new construction home loan is called a "float down" feature that allows for a change in the economy. New construction home loans that have a float-down option allow borrowers to lower the interest rate, if rates go down during the lock period. New construction home loans that are structured to become a permanent mortgage may allow a borrower to get better mortgage terms and a more desirable rate lock. This option is advertised as a "one time close." The advantage of a one time close in a mortgage is that the borrower deals with one lender, one agreement, and one closing. This is better than having back to back agreements from different lenders. All of the different options available on new construction home loans are ultimately based upon the value of a property yet to be built, however, each option should be factored carefully so that a family can afford to pay for the residence they plan to enjoy for years to come.