Here we try to answer the questions many homeowners ask when refinancing their mortgage; When will mortgage rates be their lowest? and How low will they go? These are my interest rate predictions for 2010.

My interest rate predictions are 4.69% for a typical 30 year fixed mortgage. I believe that this rate will come into effect around September, and last through April of 2010. While these rates are low, they will only match the lowest the rates were earlier in 2009.

Right now, mortgage rates are hovering around 5.19% for a typical home loan. That is still a very good rate, and nearly half of what most homeowners in the country pay. While refinancing into the current rate will probably save you money, refinancing into a rate that is just .5% lower can seriously increase your savings, or make the whole refinancing deal actually beneficial for you.

Why do I predict mortgage interest rates will drop? Well because earlier in the year, mortgage rates did drop to 4.69% When they did, homeowners everywhere were quick to apply for refinancing. Mortgage lenders and banks became overwhelmed with applications and paperwork, and had to increase rates a little to help slow the rush of interested homeowners. However, I think that around September of this year, the lenders and banks will be ready for a lot of new customers, and will reduce rates to their prior lows to attract interest.

Homeowners who are looking to save money, and need to now, should not hesitate to refinance now. Mortgage rates are still very low, and many homeowners will benefit from getting into the rates available today. However, if you can wait a little bit longer, I think you should. Mortgage rates will drop in the near future, and that only means bigger benefits when refinancing a mortgage.

-M Petrone

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