Predicting the home mortgage interest rates for 2009 can seem hard to do, but the truth is we have a pretty good idea of what to expect. Whenever someone is purchasing a home or getting a loan modification or refinance, knowing when the lowest rates are available can save you hundreds per month on your home loan. Here are my predictions for mortgage interest rates for 2009.

Only a few weeks ago, the national home interest rate average has increased by about .5% all across the country. This was accurately predicted by me in earlier articles, and I think I know why this happened, and what will happen next.

I thought that interest rates would be increased by about .5%, and they were, as a response by mortgage lenders and banks to ease the massive amount of homeowners looking to refinance or get a home loan modification. This way, the lenders and banks can separate homeowners who truly need to save their home from foreclosure or mortgage default, and those homeowners who are just looking to save money. This temporary rate increase was issued in order to catch up on existing applications and approvals which have continued to flow in since Obamas announce of his “Making Home Affordable Plan” in March.

This “Making Home Affordable Plan” allowed homeowners to get a 2% home mortgage refinancing or modification. This was made possible by the Government providing over $75 billion in cash incentives to lenders and banks who approve homeowners who are “at risk” wither credit wise, or of losing their home. As a result a large number of applications came in and the paperwork was overwhelming.

However, as 2009 continues and the mortgage lender and banks catch up on their existing customers, they will look to lower interest rates by .5% or so. I predict that this will happen around mid October, and leave the average 30 year fixed rate mortgage with a 4.69% interest rate. The mortgage lenders and banks will be hungry for more customers looking for a refinancing or mortgage modification yet again.

If you can wait a few months do so. However if you are facing foreclosure or are in a bad financial position, take action now to prevent losing your home.

-M Petrone

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