Mortgage interest rates are important when refinancing a home. With the information we have available, I think we can make some pretty accurate predictions as to where interest rates are headed. Here are my mortgage rate predictions for the rest of 2009, and a few months into 2010.

Right now, mortgage rates are slowly creeping down. An average 30 year fixed rate mortgage can be gotten for 5.19%. That is extremely low, and nearly half of what most homeowners currently pay in interest. While 5.19% is a great rate, I think there is room for it to get lower.

I predict mortgage interest rates to be around 4.69% for a typical mortgage (30 years, fixed rate). While this is not too much lower than the current rates, every little percentage helps a lot. I think that around October of this year, interest rates will drop from where they are now, 5.19%, and into the 4.69% predicted rate. Also, I believe that this interest rate will remain there until the middle of April 2010 or so. This 4.69% rate would match the all time lows, which is great news for homeowners who want to refinance.

Why are rates going to drop? Well because earlier in the year, when the rate was around 4.5%, mortgage lenders and banks saw a huge flood of homeowners looking to refinance into the low mortgage interest rate. Many homeowners pay 10% or more in interest rates, and desperately were seeking to save some money. Since so many homeowners applied for refinancing, mortgage lenders and banks raised the rates again while they had their hands full. Around October, I think they will have caught up with the paperwork, and will be looking for more customers.

Homeowners should wait just a little longer if they can, otherwise, interest rates are still very low, and will probably save you money regardless.

-M Petrone

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