TEXAS ADJUSTABLE RATE HOME EQUITY LOAN

An Adjustable Rate Home Equity Loan is ideal for lowering your initial monthly payment obligation, and is available on both homestead and non-homestead properties. A homestead property is generally considered your primary residence in Texas. A non-homestead property is typically a second/vacation home, or a rental/investment property.

Here’s how it works.

With an Adjustable Rate Home Equity Loan¹, you can get an initial fixed rate for a term of 1, 3, 5, or 7 years. After the initial terms ends, your rate may adjust based on the 12-month London InterBank Offered Rate (LIBOR).

Why an Adjustable Rate Home Equity Loan may be right for you:

You may be able to deduct your interest expense on your taxes, just like your mortgage²
The closing cost is typically lower than refinancing your first mortgage
The initial monthly payment is typically lower than a fixed rate loan
You will be in your home for the initial fixed rate period
You think interest rates are on their way down in the next few years
Offers some protection against interest rate increases

Features of a Home Equity Loan include:

Initial fixed rate for 1, 3, 5, or 7 years
Interest-only payments available for 1, 3, or 5-year initial period ³
Up to 30-year terms
$10,000 minimum loan amount ⁴
Up to $1 million for loan requests to access equity
Up to $250,000 for purchase requests

The links below can also help you make a more informed decision and show you how the application process works.

Texas Home Equity Comparison Chart

How to Use the Equity in Your Home

Understanding the Application Process

Email This Page

Printer Friendly Version

¹ For example, a $100,000 Adjustable Rate home equity loan with a term of 360 months and an initial fixed term of 3 years (other initial fixed terms are available) at an interest rate of 7.01% (7.11% APR) for 36 months would have a monthly payment of $672.66. Thereafter, the interest rate applicable to the remaining balance will be based on an index (the London InterBank Offered Rate as published in The Wall Street Journal, Eastern Edition) plus the margin stated in the Note and the monthly payment will change annually according to the terms of the Note. The interest rate cannot increase or decrease more than 2.00% annually at the end of the initial fixed-rate period or more than 6.00% over the life of the loan. (Different interest caps may apply depending on the initial fixed term chosen.) If the interest rate were to increase by 2.00% after the initial fixed term, your payment would increase from $672.66 to $813.43 at the beginning of the fourth year and could adjust every year thereafter. If the interest rate were to increase by the maximum of 6.00%, the monthly payment could rise to a maximum of $1118.14. Other rates and terms available. Products not available in all states.

² Consult your tax advisor concerning interest deductibility.

³ For example, a $100,000 adjustable-rate home equity loan with a term of 360 months, an interest-only period of 3 years (other periods are available), a first payment due date 30 days after loan closing and an interest rate of 7.21% (7.31% APR) would have a monthly interest-only payment range of $558.61 to $638.41 for 36 months. At the beginning of the fourth year, the interest rate applicable to the remaining balance will be based on an index (the London InterBank Offered Rate as published in The Wall Street Journal, Eastern Edition) plus the margin stated in the Note, and the monthly payment will change annually according to the terms of the Note. The interest rate cannot increase or decrease more than 2.00% annually at the end of the initial fixed-rate period or more than 6.00% over the life of the loan. (Different interest caps may apply depending on the initial fixed term chosen.) If the interest rate were to increase by 2.00% after the initial fixed term, your payment would increase from approximately $638.41 to $846.01 at the beginning of the fourth year and could adjust every year thereafter. If the interest rate were to increase by the maximum of 6.00%, the monthly payment could rise to a maximum of approximately $1144.49. Other rates and terms available. Products not available in all states.

⁴ Loan amounts are based upon collateral value, creditworthiness and state maximum loan to value limitations. In accordance with state law, the maximum combined loan to value ratio may not exceed 80% of the fair market value of your homestead property. For non-homestead properties, the combined loan to value ratio may not exceed 100% of the fair market value of the property. The loan amount you may receive will satisfy the state maximum loan to value limitations, but may be limited further based upon the value of your collateral and your creditworthiness.

All loans and lines of credit are subject to credit approval, verification, and collateral evaluation and are originated by Wachovia Mortgage, FSB, Wachovia Bank, National Association, Wachovia Financial Services, Inc., or where applicable Wachovia Bank of Delaware, National Association. Products are not available in all states and are subject to change without notice.

Member FDIC

Equal Housing logo