Rate creep. (Investments & Finance).

IF you haven't taken advantage of some of the lowest consumer interest rates in eight years, now's the time to do it. You don't know when higher inflation, an oil shock or a revived economy may swiftly halt the low-interest-rate party.

David Wyss, an economist for Standard & Poor's Corp., expects the Fed to raise interest rates by August and for 30-year mortgage rates to rise a percentage point today's level. Mortgage rates will "gradually creep up to the 7.75 to 8 percent range over the next 18 months," Wyss said.

While the Commerce Department reported that the U.S. economy expanded at the fastest rate in more than two years in the first quarter, there also are less encouraging signs about the recovery, such as an unemployment rate that hit a 7 [1/2]-year high in April.

This means that there's still a window for you to lower your overall finance costs before rates rise.

Taking advantage of low finance rates sometimes means defying conventional wisdom. You need to know which loan is right for you because the lowest rate isn't always the best.

Whether you're refinancing or buying a home, mortgage rates are still attractive.

The average 30-year fixed-rate mortgage fell to 6.78 percent recently. At this time last year, the 30 year rate was at 7.12 percent, so it's still prime time to take a advantage of low rates.

Most homebuyers or refinancers are immediately drawn to the relatively low rates on adjustable-rate mortgages, or ARMs. These mortgages ratchet up and down with short-term interest rates in are a point or more lower than fixed-rate mortgages.

You can never predict where mortgage rates will go. Unlike 30 year, fixed-rate mortgages, ARMs are linked to short-term interest rates -- and that can make them dangerous vehicles in a time of rising rates. Your monthly payment will quickly and predictably jump if rates rise.

The conventional wisdom about when to refinance was to wait until you could shave a full point off your present mortgage. Refinancing, unfortunately, triggers a bevy of expenses -- new appraisal, credit report, title insurance and other fees.

You can gauge the value of refinancing by finding the lowest-rate, lowest-fee mortgage available. Then estimate your closing costs and how long you expect to stay in the home. If you will be in the house long enough to pay off the costs of refinancing, then it makes sense.