2 strategies to combat rising interest rates

Preapproval for max mortgage amount can offer fallback

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In mid-April, mortgage interest rates on 30-year fixed-rate loans increased to 5.21 percent, an eight-month high and a reminder that low interest rates won't last forever. Since then, rates have dipped below 5 percent to near-record lows. Interest rates are expected to be higher at the end of 2010 than they are now, perhaps in the 5.5 percent to 6 percent range, according to sources like Fannie Mae and the National Association of Realtors. Between now and then, rates are likely to be volatile. Borrowers who are applying for a mortgage aren't protected against a sudden rise in rates until they lock in a rate. Mortgage rates can change two to three times a day. If you can lock in a reasonable rate, you should. It's hard to pick the bottom of a rate cycle. Within the blink of an eye, you could miss a super-saver rate and end up with a higher rate than if you'd locked in a rate sooner. Homeowners who are refinancing can afford to put their application on hold if rates jump and ...