A lot of people, especially homeowners, would benefit from being able to predict, or at least trend, mortgage interest rates for 2009. Getting the best interest rate is the key to saving as much as possible when buying, refinancing, or modifying a home. Well, we do have some information to work with, and using that, here are my home mortgage interest rate predictions for 2009:

The average interest rate for a 30 year fixed home loan, right now, is about 5.19% all across the country. This is including the recent interest rate increases which have recently been upped by .5% from their prior average of 4.69%. While this new interest rate is still extremely low, and much lower than most homeowners have now, it is not the lowest the interest rates will be for the rest of 2009.

As I had predicted earlier in the year, I had a feeling home mortgage interest rates would increase by .5% or so to aid mortgage lenders and banks flooded with paper work from homeowners refinancing or loan modification applications. When the rates were at the 4.69% mark, homeowners flooded lenders and banks with applications and information requests, all in an attempt to save money or their home from foreclosure. The amount of work quickly piled up for lenders, and a rate increase of .5% was enacted to slow down the paperwork coming in. Now, homeowners looking to save money are holding back on applying, and only homeowners truly facing financial hardships, or foreclosure, are applying.

What this means for homeowners and potential home buyers is that if they can, they should wait until mid October or so to get a home loan refinanced, or modified. I think around mid October, the lenders and banks will be caught up with the pending applications, and be ready and hungry for a new round of home loan refinancing and modification before the end of the year. So if you can, wait it out a little and ensure you are getting the lowest rate possible. If you are facing foreclosure, you should get a home loan refinance or modification now and try to take control of the situation and save your home. While 5.19% is not the absolute lowest rate of the year, it is still an incredibly low interest rate, and can be used to save homeowners hundreds per month in interest payments. Take action now.

-M Petrone

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