Homeowners are very interested to know where mortgage interest rates will be going. Refinancing or getting a home loan modification when interest rates are their lowest, saves a lot of money from unnecessary interest payments. Here are my home mortgage rate predictions for mortgage rates in 2009:

Right now, mortgage rates are around 5.19% for a 30 year fixed rate home loan. Remember though that only homeowners who have a good FICO score, and either 20% equity in their home or 20% cash down can take advantage of the lowest rates. However, homeowners with less than perfect credit should still jump at the chance to refinance or modify their home loans. Even though rates are not their lowest, they are still plenty low to save millions of homeowners hundreds of dollars per month. However, if you can wait at all to go through with your refinancing or loan modification, I would, and here is why.

Recently, home interest rates have been increased across the board by about .5%. While this is not a extreme change, it did allow the mortgage lenders and banks a chance to catch up on their paperwork from homeowner applications which have been flooding in since Obamas “Making Home Affordable Plan” announcement. Now, with the increased rate, the lenders have pretty much stopped the applications from homeowners who just want to save money, and are focusing on homeowners who need to save their home. Once these applications are done, the mortgage lenders and banks will be hungry and ready for a new round of home loan modifications and refinancing. So, when this happens, around mid October I predict, home interest rates will drop by .5% or so to an average of 4.69% for a 30 year fixed rate home loan.

So, basically, a homeowner who is looking for a home loan refinancing or modification should wait, if they can, until October and get what I predict will be the lowest interest rate of the year. However, if you are facing foreclosure, or serious financial hardships, you should take action now and do something about it. The situation will only get worse, and more costly to get rid of. Do something now and ensure your financial future.

-M Petrone

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