Key interest rates are marching in the same direction — up — and the Federal Reserve Board did nothing to stop that trend by raising the federal funds rate earlier this fall.

But what's that got to do with the price of eggs?

“From a homeowner's standpoint, a higher federal funds rate means higher borrowing costs for home equity loans, credit cards and some personal loans,” says Richard Roll, president of American Homeowners Association. “That's not good news for home buyers or consumers when combined with higher mortgage rates.” For information, go to http://www.ahahome.com

The Federal Funds Rate does not directly affect mortgage rates — mortgages are more closely tied to U.S. Treasury notes. But monthly payments on home equity lines of credit, credit cards and some personal loans will go up. The only possible bright side for consumers could be slightly higher returns for certificates of deposit, money market accounts and interest-bearing checking accounts.

Mortgage rates have crept up around the 8-percent mark. Freddie Mac reported that the average interest rate for a 30-year, fixed-rate mortgage edged down to 7.93 percent for the week ending Aug. 20.

That's down from the previous week's average of 8.15 percent. A year ago, however, the 30-year rate averaged a full percentage point less at only 6.92 percent.

Home buyers can counteract higher rates by taking out an Adjustable Rate Mortgage. Why is the interest rate so important to the first-time home buyer? Because generally speaking, you'll be paying more interest than principal during the early years of owning your home.

Your monthly ARM payments will be lower to start off with because these loans generally begin with an interest rate that is 2 to 3 percent below a comparable fixed rate mortgage. You could use the lower rate to buy a more expensive home, or use the savings for other needs.

What's the catch? The interest rate changes at specified intervals (for example, every year) depending on changing market conditions and the particular “index” your rate is tied to. If interest rates go up, so does your monthly mortgage payment. However, if rates go down, your mortgage payment will go down, too.

For information on any aspect of buying a home, go to http://www.ahahome.com. the web site for American Homeowners Association.