If you are looking to borrow, don't let interest rates scare you. Despite how the increase is being played up in the media, they aren't that bad yet.

Yes, those with alternative and adjustable-rate mortgages are going to be feeling a crunch when the interest rates adjust. Especially those that did not plan into the future. But there are many wise homeowners that made sure that they could afford any adjustments that could occur. Others are taking the opportunity to refinance right now for a fixed-rate mortgage.

And yes, rates have gone up quite significantly in the past two years. But you have to look at where they started off. Interest rates were at record low levels. You don't have to look too far in the past (say back to 2000) to find 30-year fixed rates in the low eights. In many expert opinions, interest rates remain at a modest level for the average borrower.

See the key isn't necessarily found in the rate itself. The key is in buying what you can afford. Regardless of the rate. You may find that with price appreciation, you may have to buy a less expensive home. Will the interest rate hurt you that badly?

If you are planning on a $300,000 mortgage, you may have to settle for a $285,000 one. That is the qualifying difference between a 6% and 6.5% mortgage.

Don't worry about the gloom and doom that is predicted by many financial writers. It isn't universal and it may not apply to you. Many areas of the country are seeing booms while others are seeing busts. Prices are still going up in some areas, while prices are on the decline in others.

In fact, all markets cycle up and down. They go up, adjust themselves down and then go up again. If you are a current homeowner worried about the market affecting your property value, you probably don't have much to worry about. If you maintain your home and live in a decent neighborhood, over time the fluctuations should level you out to a reasonable rate of appreciation.

Don't simply assume that you won't be able to sell your home. Those with homes priced according to the area will find a buyer. There may not be a bidding war, but there will be a buyer.

Regardless of your situation, you shouldn't panic just yet. Rates will go up gradually, not jump all at once. You can adjust your budget over time.

Part of wise financial management is making decisions based on your individual finances, not the market or average or lender's advice. Look to what you can afford, when you can afford it. Make your decisions wisely. After all, those with no debt don't worry about interest rates.

Martin Lukac (http://www.MartinLukac.com), represents http://www.RateEmpire.com and http://www.1AmericanFinancial.com, a finance web-company specializing in real estate/mortgage market. We specialize in daily updates, rate predictions, mortgage rates and more. Find low home loan mortgage interest rates from hundreds of mortgage companies!