Home mortgage interest rate predictions for 2009 can be tricky to estimate, but we do have some good information to work with. Refinancing or loan modification when interest rates are at their absolute lowest will save a homeowner hundreds to thousands of dollars. Here, we will try to predict home mortgage interest rates for 2009.

Not too long ago, the average home interest rates increased by .5% for the first time in months. As I predicted in earlier posts, months ago, I think the rates were increased due to the overwhelming response to Obamas “Making Home Affordable” plan which offered millions of homeowners new refinancing and home loan modification options to help them ease their financial strains, and avoid a foreclosure on their home. The mortgage lenders and banks have applications piling up and in response increased the rates by .5% to weed out homeowners who want to save money, from homeowners who truly need to refinance to save their home. For a homeowner who is looking at refinancing or loan modification as a source of saving their home, a .5% interest rate increase will not stop them from applying, while the opposite is true for those just looking to save money. Therefore, the applications will be reduced and lenders and banks can get caught back up.

This is where my mortgage interest rate prediction for comes into play. For the remainder of 2009, I expect home interest rates to drop, by .5% to their prior position of around 4.69% for a fixed rate 30 year home loan. I think this due to the fact that once the mortgage lenders and banks get through approving the current crop of applications, around mid October or so, that they will be ready and hungry for another round of Government backed refinancing and home loan modification and will reduce the interest rates to attract interest from homeowners.

If you can, wait until the middle of October for a refinancing or mortgage modification. This way you will get the lowest rates of the year, and probably lowest rates ever. However if your financial situation is in dire need of a fast dramatic improvement, now is still a great time to refinance your home loan.

-M Petrone
www.RefinancingCondo.com

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