67% Rate Locking/Floating Rule
67% Rule to Floating
Floating a loan rate is a risky endeavor. Rates can do only three things in the future, rise, fall or remain the same. When making the choice whether to float or lock, consider this.
If you choose to float:
Rates fall, you win Rates remain the same, you lose*
Rates rise, you lose
2/3 or 67% of the possible outcomes are negative.
If you choose to lock:
Rates fall, you lose****
Rates remain the same, you win
Rates rise, you win
2/3 or 67% of the possible outcomes are positive.
Remember, the only person in a casino who is not gambling is the house because they have the probabilities on their side.
* You lose if rates remain the same because you were taking a huge risk and not being rewarded for it. That is a losing proposition.
**** When you work with a reputable mortgage consultant you will have the opportunity to renegotiate your rate should they drop after you lock. This creates a win-win situation for everyone pushing your odds to over 99% of getting the best rate. Call or email me for more details.
Floating a loan rate is a risky endeavor. Rates can do only three things in the future, rise, fall or remain the same. When making the choice whether to float or lock, consider this.
If you choose to float:
Rates fall, you win Rates remain the same, you lose*
Rates rise, you lose
2/3 or 67% of the possible outcomes are negative.
If you choose to lock:
Rates fall, you lose****
Rates remain the same, you win
Rates rise, you win
2/3 or 67% of the possible outcomes are positive.
Remember, the only person in a casino who is not gambling is the house because they have the probabilities on their side.
* You lose if rates remain the same because you were taking a huge risk and not being rewarded for it. That is a losing proposition.
**** When you work with a reputable mortgage consultant you will have the opportunity to renegotiate your rate should they drop after you lock. This creates a win-win situation for everyone pushing your odds to over 99% of getting the best rate. Call or email me for more details.
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