What describes floating a rate initially disclosed as 5% and locking in at a lower rate of 4.75%?

Floating a rate refers to the practice of keeping a mortgage interest rate open for adjustment rather than locking it in at a set rate. Initially disclosing a rate of 5% signifies that the borrower is aware of the possible rate being considered, but it does not mean that they must accept that rate if it changes. When the rates drop, as in this case where they lock in at a lower rate of 4.75%, it demonstrates the lender's commitment to providing the borrower with the best possible terms available.

This process is both legal and ethical since it allows borrowers to benefit from lower rates without any deceptive practices involved. The lender is acting transparently by informing the borrower of the original rate while also making the opportunity for lower rates available. High ethical standards in the lending industry support the practice of giving borrowers the ability to lower their interest rates based on changing market conditions.

In contrast to this, other choices imply either illegality or unethical behavior which does not pertain to the scenario of floating and locking in rates. The current practices surrounding rate quotes and locks comply with regulatory standards and professional ethical standards within the mortgage industry.