Last column discussed how March’s strong economic data triggered a jump in rates. Since that time, in fact for the past five weeks, treasuries have dropped, the yield on the 10-year bond has climbed and, with it, so have mortgage interest rates. Assuming that this trend will continue, and in light of the fact that Spring and Summer are prime home buying seasons, what strategies can mortgage shoppers utilize to protect themselves?

Let’s begin with existing homeowners. For those few who procrastinated throughout the rock bottom interest rate period, forget about missed opportunities – they are gone. Focus instead on current and future chances to seize a better rate. True, rates are on a steady upswing. During most trends, however, there are invariably isolated incidents, windows of opportunity, when rates might drop for a short period before resuming their climb. The best way to seize upon these respites are to pay close attention to the market, have a target rate in mind, and if the rate drops to the target level, lock it immediately. Don’t greedily wait for the rate to continue to drop. A window can slam shut quickly. Remember, rates are slow to drop and quick to rise.

As the weather heats up, so does the selling and buying of houses. For house hunters, cursing the rising rate environment, don’t despair and keep things in perspective. While rates have jumped somewhat, they are still dramatically below the double digit figures of years ago. Thirty year, fixed rate loans can still be locked at around 6 percent. Not good enough? Depending on the individual, other options to consider are hybrid ARMS’s (adjustable rate mortgages) with initial low, fixed interest rate periods of usually 3, 5, or 7 years. If rates continue in this direction, the mortgage industry can expect to see a marked increase in adjustable rate mortgage loans.