Now interest rates are on the rise.

Borrowers who took advantage of incredibly low variable rates (ARM) and extended their payments to the edge of their means are now beginning to feel the crunch. Some are learning that the new payments are beyond their income limits. In response, many are looking to lock in an interest rate. For most, it is already too late.

With payments too high to manage, borrowers are struggling to find an answer. Some are looking to the sell and rent back property industry that is springing up. These companies offer exasperated consumers the option of selling their home (below market value) quickly - sometimes as quick as one week - without any closing fees or other cost associated with selling a home.

After the sell, the consumer can rent the property at a payment that is often less than the mortgage payment. It seems like the miracle answer for many borrowers. For most, this should be the last resort.

Before a home owner turns to the method of sell and rent back property, they should consider all other possible means.

1. If there is equity in the home, it may be possible to refinance at a lower than prime rate - especially if the credit is strong.

2. It may be possible to defer mortgage payments for a couple of months while something is worked out. It never hurts to talk to the lenders, but you must talk to them AS SOON as you realize there is a problem. Don't put it off.

3. Supplement your income with weekend or evening work while you put the house on the market. Better to downsize than to lose your credit rating.

There are always options that haven't been considered yet. There are even private lenders that could be willing to work out a plan. If keeping the house is an absolute must, then look in to options beyond the sell and rent back property industry. In the long run, you will be more satisfied with the results.

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