Here I will make my mortgage rate prediction for the rest of 2009. We have some good information to use, and we will explain how we made these predictions, and why it is important. Saving even a tiny bit on mortgage interest rates can save a homeowner thousands of dollars, if they know when to take advantage.

Right now, mortgage rates are around 5.19% for a standard 30 year fixed rate mortgage. However earlier in 2009, up until about March, home interest rates for the same loan were around 4.69%. Although it seems small, that .5% in interest can save a homeowner a lot of money, and I think its coming back.

I think the increase in mortgage rates that took place was due to mortgage lenders and banks being overwhelmed with homeowners looking to refinance or get a home loan modification. Factor the low interest rates, a struggling economy, a bad housing market, and President Obamas $75 billion housing bailout plan, and homeowners were flocking to refinance or modify their mortgage. The lenders and banks quickly became flooded with applications from homeowners who are struggling to make their payments. The interest rate increase had to take place to stop the overflow of applications, and separate the truly desperate homeowners, from those just looking to take advantage of the low interest rates to save money. So, as said earlier, interest rates for a typical 30 year fixed rate home loan stand around 5.19% nationwide. However this is where my predictions come in.

I think that the mortgage rates will go back down to their prior lows of around 4.69% due to the mortgage lenders and banks being ready for a new wave of homeowners who need a mortgage refinancing or modification, and them being caught up with the prior applications. These mortgage rates of 4.69% should start sometime around the middle of October 2009, and last through around April of 2010.

Homeowners who can wait should see just how low these interest rates will go and then take advantage. However, if you are facing foreclosure, defaulting on your mortgage, or facing financial hardships, you should take action now before your situation gets worse.

-M Petrone

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