Be afraid. Be very afraid.

If you used an interest-only or so-called option mortgage to stretch into an unaffordable house in the last year or two, you could be facing some dark times.

Those loans were designed for helping people get into houses with the smallest amount of initial cash flow. They were aimed at keeping the housing market and refi deals booming through the first wave of interest-rate increases that were starting to disqualify some buyers and borrowers.

But now some of those buyers could have worse problems than missing out on the home of their dreams. As mortgage rates continue to rise and those creative mortgages move past their introductory teaser rates, the monthly payments on those mortgages are moving up fast. In many cases, they are moving up faster than the value of the home and faster than the owner's ability to keep up with payments.

These nontraditional mortgages are going to create a lot of human misery in the next several years, says Stephen Brobeck, executive director of the Consumer Federation of America.

It wouldn't be the first time. In the late 1980s and early 1990s, housing markets as diverse as Houston and Boston saw homeowners trapped in houses they couldn't afford to carry - or to sell. In oil-based Houston in particular, some homeowners simply walked away from their houses and mortgage obligations, losing their homes and their clean credit reports in the process.

In 2005, foreclosures were up 25 percent from 2004. Foreclosures this year are already running almost double what they were in 2005, according to RealtyTrac.com, a company that monitors this data.

That's enough to cause concern for the National Foundation for Credit Counseling. The group's president, Susan Keating, recently said she sees the $2-trillion in adjustable rate mortgages written in the last two years as indicative of a growing crisis.

Consumers are over-extended with their mortgages and many ... homes will be at-risk with rising interest rates, she said, adding that many consumers signed up for products they did not understand.

Don't panic just yet if you're one of those consumers. Instead, consider these defensive steps in a worst-case scenario.

- Stockpile cash. The first, easiest thing to do is to save as much money as you possibly can. If you have a rainy day fund, you can use that to keep up payments once they start to rise. If you don't have a rainy day fund, get one. Do that even if it means moonlighting, renting out a room of your house, holding weekly garage sales, skipping your summer vacation or doing some driving or baby-sitting on the side. If your mortgage payments stretch your monthly budget now, and you've got no emergency savings, you are very vulnerable. If you have those savings, you have room to maneuver and negotiate.

- Refinance. The one bit of good news is this: If you got into one of those mortgages in the first place because you lacked a solid credit score, the two years or so you've been paying on them heretofore could raise your score. And that would qualify you for a better mortgage.

- Make your mortgage payments no matter what. Getting behind on your mortgage is about the worst thing you can do, in terms of your future borrowing ability, your ability to hold on to your house, and your peace of mind.

Make your payment - even if you have to pay minimums on your credit cards, cancel the cable and hold your dentist and auto mechanic off for another month. (Note that I'm not advocating stiffing the dentist or keeping credit card payments to a minimum, but desperate times call for those desperate measures.) If you have an option mortgage that allows you to move to a lower payment for a while, do that if it's the only way to keep your payments current. But know that it isn't a long-term solution.

- Get help. The consumer credit counseling industry has been training their experts for just these situations. Find one at http://www.creditcounseling.org. Look for someone who has specific experience or expertise with housing issues.

- Consider moving. Be honest with yourself about your budget. If you really can't afford to stay in your house, sell it and move on. Don't think of it as giving up a dream, think of it as getting out of a bad financial deal while the market is manageable.

Downsize to a house that you can buy with a better loan, and think about moving up to your dream house some other year, when you can manage the payments more easily.

After all, what good is a designer master suite if you can't sleep at night?

(Linda Stern is a freelance writer. Any opinions in the column are solely those of Ms. Stern. You can e-mail her at lindastern(at)aol.com.)

Mortgage