Lock Today And Save Tomorrow With Rate Drop Advantage

It’s an exciting time in your life. You feel like you’re ready to purchase a new home or refinance your current one to help accomplish a personal or financial goal. But it’s natural to want the best deal possible and you hear rates might be dropping. When is the right time to make a move?

With Rate Drop Advantage, there’s no need to consult any oracles or chart the position of the stars to check for ideal alignment. You simply lock your rate today. If rates drop later, you can refinance with reduced closing costs.¹

Lock Now And Save Big Later

Rate Drop Advantage allows you to lock a rate today if you like it. Beginning 4 months after the close of your loan and continuing for 18 months, you’ll have the ability to refinance with certain closing costs waived. This could enable you to jump on lower rates without having to worry about covering a large check at closing again.

This is available to you whether you’re looking to purchase or refinance between November 1 and December 31. The following represent closing costs covered if you were to refinance through this Rate Drop Advantage offer:

• Origination fee
• First appraisal
• Credit report
• Flood life of loan fee
• Flood certification
• Underwriting
• Processing
• Amrock Appraisal Services
• Tax certification
• Notary
• Recording

Based on Rocket Mortgage internal data, it’s estimated that the average client would save around $2,200 by utilizing this offer.

What’s The Advantage Of This Option?

If you’ve been following economic news in preparation to purchase or refinance, you may have heard the Federal Reserve anticipates lowering the federal funds rate several times over the coming year as its focus has shifted from trying to tame inflation to the labor market. But if you haven’t been knee-deep in economic publications, let’s recap.

The Fed controls the range for the federal funds rate, which is the rate at which federally insured banks borrow from each other overnight. It tends to have a direct impact on shorter-term rates more than longer-term ones, but everything tends to flow in the same direction.

If they follow their current projections, Fed officials plan to lower the target range for their main interest rate control mechanism quite aggressively over a period of years. But there are a couple of things to keep in mind here.

First, the Federal Reserve’s future plans for interest rates could change at any time. Officials are constantly reviewing incoming economic data as well as geopolitical factors in the United States and across the globe to balance risks and try to get the temperature of the economy just right.

Too hot with low interest rates often means higher inflation, while higher interest rates that are too cool tamp down inflation through lower spending, but the labor market can suffer and move toward recession.

The second factor is that the market tries to anticipate what’s going to happen with interest rates. This facilitates smooth transactions for the bonds that underlie the vast majority of U.S. mortgage financing and help determine interest rates.

There’s usually a period of 60 days or more between your closing and when the loan is packaged into a bond to be sold to investors. The market is always trying to figure out where rates will be a couple of months into the future. Even if the Fed lowers rates, mortgage rates may go up if anything the Fed says isn’t aligned with market expectations. So locking a rate you like avoids the roller coaster.

The Bottom Line

Rate Drop Advantage lets you take advantage of an interest rate you find attractive today to purchase or refinance. Then, later on, you’ll have an 18-month time frame during which you can refinance with lower closing costs should rates fall. It’s the best of both worlds, offering certainty both today and tomorrow.

Please speak to your Home Loan Expert if you’re interested in learning more. Lock your rate if you like what you see! You can refi in the future if rates drop.

¹ Client is eligible for Rate Drop Advantage program when they lock their initial rate on a purchase or refinance home loan between November 1, 2024, and January 31, 2025. Rate Drop Advantage grants eligibility for waived fees on a new refinance loan on the same property between 120 days and 18 months after closing date of eligible loan. Rocket Mortgage will cover the following fees as a lender-paid credit: first appraisal fees, credit report, tax certification, flood certification and life of loan, notary fees in Pennsylvania and New York, recording fees, and origination fees. Offer may not be redeemed for cash or credit and is nontransferable. Offer cannot be retroactively applied to any loans. Offer may not be used with any other discounts, promotions or interest-only/buy-down and second lien products. This offer is subject to changes or cancellation at any time at the sole discretion of Rocket Mortgage. Additional restrictions/conditions may apply. This is not a commitment to lend.