Here are my predictions for mortgage interest rates in 2009. Keep in mind though that no one can ever be 100% sure what the housing market will do and often predicting mortgage rates can be tricky thing to do. However, we do have some good information we can work with to make a good guess as to what mortgage rates will be in 2009:

When you refinance, get a mortgage modification, or are looking to buy a home, getting the lowest interest rates possible is the best way to ensure that you save the most money you can on your monthly mortgage payments. Whether refinancing or getting a home loan modification, the lower the interest rate the better. Earlier in the year home mortgage rates were 4.69% or so for a typical 30 year fixed rate home loan. A few weeks ago though, the rates crept up by .5%. I predicted this increase earlier in the year, and think it was due to mortgage lenders and banks needing to focus on homeowners truly in danger of losing their home, and not looking for lower monthly payments. However, I do not expect these 5.19% average interest rates to last for much longer. I predict that around October of this year, home mortgage rates will be reduced by .5% so they are equal to their year lows of 4.69% for a 30 year fixed rate home loan.

I think that the rates will be reduced because the mortgage lenders and banks will be ready to take on a whole new wave of homeowners looking to get a mortgage refinance or modification. The rate reductions will spark a whole new flood of interest, and save a lot of homeowners from foreclosure at the same time. If you are a homeowner who needs to take action to save your home from foreclosure take action now before it is too late. However if you can I think it may be wise to wait a few months until the rate reduction I predict takes effect.

-M Petrone

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