According to this article, Wachovia Corp. will be waiving the pre-payment penalty for clients who have an option ARM loan.

Will this move be duplicated by other option ARM lenders, such as Washington Mutual, Downey Savings, Chevy Chase Bank, and Countrywide? Stay tuned.

Ironically, the rates on many of these option ARM loans are going down, and will probably continue to go down for awhile.

Although the rates may continue to go down on these loans, I think it would be wise for homeowners with this type of loan to check out other options. Property values in the future are a concern of mine. If a homeowner waits to refinance because their rate is attractive now, they may not be able to refinance later because their property value may be lower. It would be wise for these homeowners to contact a competent mortgage advisor to find out what their options are right now.