Even a small change in interest rates can mean a big savings for a homeowner looking to refinance their home. Here, I will predict mortgage interest rates for the rest of 2009, and a for a few months in 2010. Also, I will tell you why I think the rates will change for the benefit of homeowners sometime in October of this year.

Lets just get right to it. I predict that mortgage interest rates in 2009 will be lowered down to their previous lows of around 4.69% for the typical 30 year fixed rate home loan. Currently, rates are around 5.19% for that same loan type. While 5.19% is still really low, refinancing and saving .5% really adds up to a lot of money in the long run.

Homeowners have an average interest rate in this country of around 9%. A 4.69% interest rate is nearly half of that. The savings would be incredible if a homeowner could refinance into such a low rate. I think it will be possible in October of 2009. This is when I predict that mortgage interest rates will be lowered to their previous lows of 4.69%. If a homeowner can hold off until then, they should to take advantage of the lowest rates possible.

I predict mortgage interest rates will lower in October because this is when mortgage lenders and banks will be looking for a new round of homeowners applications for refinancing. Right now, and for the past few months, mortgage lenders, brokers, and banks, have been flooded with desperate homeowners looking to save money, or save their home from being lost. While this is good for homeowners, it quickly led to a paperwork nightmare for lenders, and rates needed to be increased to help stop the flow. While the rate increase was only .5% this was enough to scare off most homeowners just looking to save money, yet still allowed homeowners at risk of losing their home, a chance to save it.

The bottom line is, I think mortgage rates will be lowered in October of this year. While not by much, saving even .5% truly adds up to a significant amount of money in the long run.

-M Petrone

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