If a homeowner is looking to get a mortgage refinancing or loan modification, then knowing when the lowest interest rates of the year will be available could save you a lot of money. That is why here we will predict where home mortgage rates will go in 2010. We do have good information which will help us make this prediction, and explain how we came to it. So here are my mortgage interest rates for 2010:

Earlier in 2009, home mortgage interest rates were at their lowest ever in the recorded history. Home rates as low as 4.5% for a 30 year fixed rate mortgage were available to homeowners all across the country. The normal rate, up until a few weeks ago was around 4.69%, then rates increased by .5% to 5.19% which is still an extremely low interest rate compared to low rates of the past. The increase was a response by mortgage lenders and banks to curb the flow of refinancing and modification applications and try to focus on homeowners who are truly in risk of losing their home to foreclosure or defaulting on their mortgage. Around the middle of October this year, home rates should drop again to their prior average of around 4.69% as lenders and banks look for new customers and are ready for a new round of refinancing and loan modifications. This rate should continue into early 2010. Then some things change.

Early in 2010, I predict mortgage rates will be around 4.69% for a 30 year fixed rate home loan. However, sometime around April, I expect mortgage interest rates to make a huge increase by 1% to 1.25%. This is a very substantial leap, and will cost homeowners who didnt take action prior to the increase a few hundred dollars, on average, every month.

To sum it all up in 2010 I predict the interest rates will be around 4.69% until around April or so, then expect to see an average interest rate of 5.9% or so. Homeowners looking for a home loan refinance or modification should take action now before anything else happens. The rates being offered now are still very low, especially with what is predicted for 2010. Do something now and take action, refinancing or mortgage modification are a great way to save your home from foreclosure, or defaulting on your mortgage.

-M Petrone

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