Should I lock in my interest rate or wait?

Q: Interest rates are on the rise for home loans (30 yr FHA), but we have the option to wait to lock, will the rates continue to climb? should we lock now at 4.875% or wait until Jan? We're scheduled to close Feb 28, 2011.

A: Rates increased at the end of 2010 but have mostly stabilized. In general, we suggest that you lock in your interest rate when it is at a level which makes your deal work, rather than trying to time any bottom or dip in rates. To follow rates, read HSH.com's weekly MarketTrends newsletter, Two-Month Forecast for mortgage rates or even our latest Annual Outlook.