Homeowners who are looking into refinancing or mortgage modification will benefit from knowing when to expect the lowest interest rates of the year. Getting the lowest mortgage rate possible is the easiest way to save a lot of money on your home loan. Here are my mortgage rate predictions for 2009.

Right now, a typical mortgage which is a fixed rate, and 30 years in length, can be had for around 5.19%. While this is still an extremely low interest rate, about half of what rates were 5 years ago, it is not the lowest it has been, or will get. Earlier in the year, the same home loan could have been gotten for 4.69%. While it is only a .5% difference, when refinancing or getting a home loan modification, this money can be the difference in saving money, or just losing more. However, I believe if a homeowner can wait until October to refinance, than the rates will be even lower.

I predict mortgage interest rates to lower back down to their low of 4.69%. I believe this will happen around October of this year, 2009, and last through April 2010. That means I think mortgage interest rates will be at 4.69% or maybe a little lower, in mid October, and last through at least April of next year.

Why do I think rates will drop again? Well around October, mortgage lenders and banks will have caught up with the enormous amount of homeowner refinancing and mortgage modification applications. The housing market will still need a push, and homeowners will still be struggling. This is a good environment for interest rates to go down to spur some activity in the housing market. To do this, rates will be reduced, and homeowners will be welcomed to apply for a money saving refinancing or modification package.

Homeowners who can, should wait. However, even at 5.19%, there is a lot of people who could refinance and save a lot of money, or even their home.

-M Petrone

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