Mortgage rate predictions for 2009 can be tricky to determine. However, I think we have some good information that helps us spot trends, and predict mortgage rates for 2009. Always remember though that these are predictions. We will show you how we came to our mortgage rate predictions, what they are, and when they will happen, throughout the rest of 2009.

When buying a new home, refinancing, or getting a home loan modification, obtaining the lowest interest rates possible is the best way to ensure you are paying as little as possible, and truly benefiting from a refinance or home loan modification. When rates were around 4.69% for a 30 year fixed rate home loan earlier in the year, homeowners flocked to refinance or modify their loans in an attempt to save money, or themselves from facing foreclosure. Mortgage lenders and banks were quickly overcome with applications, and a few weeks ago raised interest rates by .5%, making the current average interest rate somewhere around 5.19%, in order to slow the tremendous amount of applications, and focus on homeowners who truly needed help. The rate increase was enough to stop people from applying who just wanted to save money, but still allow a lot of homeowners to get a low enough interest rate to save their home from foreclosure, or themselves from defaulting on the mortgage. However, I think that things will change, and this is where my predictions start.

I predict that mortgage rates for 2009 will again drop by .5% to their prior lows of 4.69%. I think that this will take place around the middle of October in 2009, and last through April or so 2010. This will be due to mortgage lenders and banks wanting to take on a new crop of applications, and lowering rates will attract the attention they will desire.

-M Petrone

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