Overview

If you're like many Americans, you're on the move. Moving into a bigger home. Downsizing to a smaller one. Relocating for a new job. Investing in a property. Take advantage of it with an adjustable rate mortgage (ARM).

Start Low, Pay Less

An adjustable rate mortgage typically gives you a lower starting interest rate and a lower initial monthly payment which means more money at hand to either pay down your principal or use to pay other bills. And with an ARM, you can feel better knowing that you didn't overpay for a home you plan on moving out of in a few years. But keep in mind, the rate can adjust based on market rates, and may increase over time, which will increase your payments.

Wachovia Adjustable Rate Mortgages Offer

• Flexible terms to fit your life. Initial fixed terms from 1 to 10 years. ^{note 1}
• Limits on interest rate increases. Period and life time interest rate "caps."
• Lower initial payments. Some products are available with interest only repayment terms. ^{note 2}
• Generous loan amounts. Borrow up to $2 million.
• No limits. No minimum loan amount.

Fixed vs. Adjustable Rate Mortgages

Feel Good About A Wachovia ARM:

• Save .25% on your origination fee at closing by applying online. ^{note 3}
• Start an application online today and finish it anytime, 24/7.
• Get pre-qualified for free in minutes.
• Competitive rates.

Need more information?

Explore monthly payments options and more with our Mortgage Calculators.

Adjustable Rate Index Information

FAQs

• How do I know if an Adjustable Rate Mortgage is right for me?
• How does an ARM work?
• What does 1/1, 5/1, 7/1 mean?
• With so many ARM programs available, how do I know which one to choose?
• What is a cap?
• Want to see the difference in your payment?

How do I know if an Adjustable Rate Mortgage is right for me?

Well, that depends. The lower initial payments of an adjustable rate mortgage are attractive. Deciding if the risks are worth it is a personal decision for every homeowner. But here are some simple guidelines.

Choose an Adjustable Rate Mortgage if:

• You believe that rates will remain the same or decline in the future.
• You plan on moving soon, avoiding potential higher future payments.
• You believe your income will increase enough to cover increased mortgage payments, if rates go up.

How does an ARM work?

An ARM typically has an initial period and an adjustment period. The initial period can vary but it's typically one month to five years. The interest rate you had at closing remains the same during this initial period.

The adjustment period is the time in which the rate can change. Typically, a one-year ARM will adjust every year. The initial adjustment on a three-year ARM will occur after three years. Afterwards, it will adjust every year.

When shopping for an ARM, make sure you look at the quoted the initial rate and payment on a loan and the annual percentage rate (APR). If the APR is significantly higher than the initial rate, it could be likely that your rate and payments will be a lot higher when the loan adjusts, even if general interest rates remain the same. A high APR can also mean you will have to pay a lot of finance charges, or closing costs, at closing.

What does 1/1, 5/1, 7/1 mean?

These are the terms of the loan. The first number is the initial period of the loan. During this period, the interest rate will remain the same. The second number is adjustment period. That's how often the interest rate will change after the initial period.

With so many ARM programs available, how do I know which one to choose?

Wachovia ARMs come in 1/1-year, 3/1-year, 5/1-year and 10/1-year programs. The best way to decide is to factor in how many years you plan on being in the home and what you feel rates and your income will do in that time period.

What is a cap?

Basically, ARM caps limit the amount your interest rate can increase in a specific time period. There are two basic caps.

1. A periodic adjustment cap limits how much your interest rate can change at each adjustment period.
2. A lifetime cap is the maximum interest you can be charged for the entire loan term.

So when if you see numbers like 2/6, it means your loan will increase 2% during the subsequent adjustment periods, and 6% total for the life of the loan.

Want to see the difference in your payment?

Check out today's rates on Adjustable Rate Mortgages.