Knowing what to expect of mortgage rates could save a homeowner looking to purchase a home, refinance, or modify a mortgage, hundreds of dollars per month. Getting the absolute lowest interest way is the easiest and best way to ensure you have the lowest possible monthly mortgage payments. With that in mind, here are my home mortgage interest rate predictions for 2010, and my thought process behind them.

We will get right into it. I think that for most of 2010 that the national average for a fixed rate 30 year home loan will be around 5.94%. However, this is for most, not all of the year. I think that in January through April of 2010, home mortgage interest rates will be closer to 4.69%, their prior all time recorded low. This would be a perfect time for a homeowner to refinance or get a home loan modification. When rates are that low, savings of hundreds per month is not out of the question at all.

The reasons I predict these mortgage rate changes for 2010 are pretty simple to understand. A few weeks ago, the mortgage interest rates were increased by .5%. I thought this would happen because lenders and banks were flooded with a record number of home loan refinancing and modification applications. The rates needed to be raised in order for the mortgage lenders and banks to focus on homeowners at risk of losing their home first, then homeowners just looking to save money through refinancing or mortgage modification. That is why I think interest rates will drop by the same .5% around the middle of October 2009 to 4.69%.

This 4.69% interest rate should last until April of 2010, then a sharp rate increase will take place. Rates after April 2010, I predict, will jump by 1.25% to a 5.94% average, which should last for the remainder of 2010.

-M Petrone

Subscribe via email

Enter your email address:

Delivered by FeedBurner