Floating Rate????

[Anonymous]

I recently applied for a FHA mortgage loan through Bank of America...the builder told me they have a guaranteed 5.875% rate through their preferred lenders...but then turned around and said it's not guaranteed through BoA...I was approved through BoA last year...but that did not go through because of moving to a new state, with a new job, and a new pay...and with worst scores than I have now...and the process was fairly easy..I bank with them and would rather go the the mortgage loan with them...when I called she said the rate would be a floating rate...and it wouldn't be locked until closing...what does this mean for me...with a FHA loan...what's the highest this rate can go up to...I live in Houston, TX...here's my profile:

Scores: TU-643 EX-618 EQ-594
Pay: $21.50/hr - 58 hrs/week
Debt: $359.00 Car note and $80.00 CC's
Wifes Debt: $65.00CC's

Message Edited by slyhouse08 on 05-05-2008 01:35 PM

[DallasLoanGuy]

They won't lock it?

[Anonymous]

I know...they won't lock in the 5.875%..but I don't understand the whole floating rate thins...your a LO...maybe you can explain a little for me...what's the highest it can go up to with a FHA...what makes it floating...and at what point is it locked...

[DallasLoanGuy]

Noone czn predict rates... but they have been going up/down for many months and I don't suspect that it will change.

Float just means that you hav'e locked it. Locking is something we do in our secondary marketing dept to ensure that we can deliver the rate promised.