Predicting mortgage rates for 2009 and beyond is pretty complicated. The mortgage industry seems to be having a hard time right now with a lot of homeowners facing foreclosure and few people looking for new homes. Mortgage rates have recently reached all time lows across the country which is good news for people looking to buy a home or people looking to refinance. Mortgage rates are derived from current rates at which banks get money to loan out, your credit score, the lender, and all types of things. The following factors play a big role in determining mortgage rates for 2009.

The Mortgage Lender:
The mortgage lender has the ability to lower the rates they offer based on competition they face in order to increase business. With the mortgage crisis however, some lenders are scared of lending people with bad credit. When this happens the markets rates drop trying to entice good credit customers into buying or refinancing their home. What they will also do is raise the rates a few percentage points for people with bad credit in order to cover their losses should you default on your mortgage. So even with mortgage rates at all time lows, you may not be eligible to get those rates due to a low credit or fico score.

Market Conditions
Mortgage rate predictions will be affected by the current market. It is possible for mortgage rates to go down if the Federal Government cuts the mortgage rates again. This means that the government will borrow money at near 0% to banks who in turn will lend the money out to the public, hopefully at reduced rates. As everything else though, when people start rushing to take advantage of the low rates they will inevitably go back up. It is the classic supply versus demand system. This means that even if the Federal Government does attempt to force down mortgage rates the rates might not necessarily trickle down to the general public.

You, The Customer.
Mortgage lenders will play favorites. That is if you have a good credit score and stable good paying job you will get better rates, terms, and conditions. A person in this situation can usually finance 100% of their home or only have to put very little money down. The opposite applies to people with bad credit. Their rates, terms, and conditions will only get worse as their credit and fico score decline.

So in predicting mortgage rates for 2009 besides the customers credit history, the market trends, and the mortgage lenders policies all play a role. Keep in mind however that a rise or fall in interest rates of just 1% - 2% can mean thousands of dollars in savings or costs for you and your mortgage.

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