With an adjustable-rate mortgage (ARM), the interest rate you pay is adjusted periodically to keep it in line with the changing market rates. This means when interest rates go up, your monthly mortgage payment may also increase. On the other hand, when interest rates go down, your monthly mortgage payments may decrease. The ARM is attractive because it may initially offer a lower interest rate than fixed rate mortgages. The drawback to this loan is the monthly payments may increase when interest rates rise.

You may want to consider an ARM if:

• Your income will rise enough in the coming years to comfortably handle any increase in payments
• You plan to move in a few years and therefore are not concerned about possible interest rate increases
• You need a lower initial rate to afford the home you want

Veridian's ARM product:

• Will adjust annually after the initial period - one, three, or seven years
• Has a yearly cap on interest rate increases of two percent, and a lifetime rate cap of six percent
• The interest rate changes on an ARM are always tied to a financial index. Our index is the one-year Treasury Bill
• An ARM will always have a margin that is added to the index to determine the adjusted interest rate. Our margin is 2.75 percent

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