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Enjoying Low CalPERS Loan Rates
Members of CalPERS enjoy a number of benefits, one being the low CalPERS loan rates. While rates change daily, a variety of programs are eligible for low interest rates and fees to include a Jumbo 15-year Fixed Mortgage, a Jumbo 30-year Fixed Interest, FHA 30-year Fixed Mortgage, Conventional 30-year Fixed Mortgage, Conventional 15-year Fixed Mortgage, and the CalPERS Personal Loan.
Along with the low CalPERS loan rates, the program also includes a variety of free services to members such as the Free Interest Rate Tracking Service. With this, members can keep a closer eye on ever changing interest rates and fees, as well as the different combinations of options that the program provides.
A popular choice for CalPERS loan rates is with the 60-day lock-in. With this option, members are guaranteed that the interest rate quoted would be locked into for a full 60 days automatically without charge. Therefore, if interest rates were to increase, the member would be fully protected.
With this option for CalPERS loan rates, members would have the ability to get a lower rate if they went down. In addition to securing a loan with low interest, if interest rates were to drop for any reason, members would benefit from protection with an option called the “two-interest rate float down”. Although no fee would be involved to lock in for a low CalPERS loan rate, you still get protection for 30 to 90 days.
The “float down feature” that comes along with locking into a CalPERS loan rate is based on three dates to include the date the loan application was submitted, the date the loan was approved, and finally, the date that the final loan documents were created. Unlike other mortgage loans, this gives members unique protection so once the rate is locked into, it cannot go up, only down.
You can lock your CalPERS Mortgage rate for 30, 60 or 90 days. The actual interest rate and APR are posted daily by CalPERS. You can lock in less than five minutes. Contact a CalPERS loan consultant at 1.888.415.2000 to go over your locking options and to secure your interest rate. Remember, you will have two chances to get an even lower rate during the process.
What is the CalPERS Float Down Feature?
For members, whether active, inactive, or retired, benefits associated with CalPERS are incredible. Although qualifying with a program such as this is no different than with a traditional lender, the benefits are far greater. As an example, every loan officer is required to undergo basic and advanced training before loans could be offered to people under the CalPERS program. In addition, people have two options for a CalPERS float down feature.
The first choice for a CalPERS float down feature is that home buyers who are members can choose from a 60-day or 90-day rate lock-in for FHA loans or conventional. This means that the lowest rate that this program can offer for interest would be secured, and the rate would be lowered based on one of three dates. The first date would be the date the loan rate was locked in, the second would be the date the loan application was approved, and the third would be the date on which the final loan docs are drawn and sent to the title company. The second float down feature would be on the personal loan rate that is used for your down payment if you choose that option. This rate would also be decreased on the same dates as the first mortgage.
With the CalPERS float down feature, the lender agrees to drop the home buyer’s rate below what was already locked into so members of the program gain even more benefit. Commonly, the day when the loan was approved, by the underwriters is when a float down would occur but as mentioned, this could also be on the date that the loan documents were drawn up.
What happens is that when the CalPERS float down feature results in the interest rate going down, the member’s rate is also lowered without the member being charged. Now, if the rates were to be lowered on the day the loan was approved, and the same day that the loan documents were drawn, then only one float down would apply since they were both on the same day. Of course, many other benefits exist for members, which is why this has become such a popular option for securing a mortgage loan.
So what are the benefits to you for this feature?
Lets say you have an accepted offer on the house of your dreams, you call us and want to lock in an interest rate. Assuming that rates are 5.5% APR that day and you lock in for 60 days of protection. Then your loan is approved 5 days later and the rates went up to 5.875% APR. Your rate would stay at 5.5% APR since you are locked and can not go higher than that during your lock period. Then two weeks later your final loan documents are ready to be drawn and interest rates are at 5.125% APR. You will benefit by getting the lowest of all those three days and will have a final rate locked in at 5.125 APR for the life of the loan! This can represent a significant savings over the term of your loan. There is no guarantee that this will happen but it does quite often.
********Breaking News***********
CalPERS has announced that the float down feature will be discontinued.
