Mortgage rates are low right now, but I predict they will get lower. While these are only predictions, I do truly believe that these will come true. Here are my mortgage interest rate predictions for 2009, and 2010.

Right now mortgage rates are hovering around 5.2% for the average homeowner looking to refinance their mortgage. This is a far cry from the 10%+ interest rates which were normal just 10 years ago. Many homeowners could save a huge amount of money every month by refinancing into the lowest mortgage rate possible, but when will that be?

I predict that mortgage interest rates will drop by .5% in November of 2009, and stay there until April of 2010. Why? Because around November mortgage lenders and banks will just be recovering from a huge initial rush to refinance earlier in the year when interest rates were a ultra low 4.69%. When the interest rates were this low, paperwork flooded the offices of banks and lenders, which made them increase rates to slow down the applications. These rate increases, just .5%, were low enough to still help homeowners who need it, but high enough to scare off people who just want to save money. However, this backlog of paperwork will not last forever. In fact, I think that it will only last until November. That is why I predict that mortgage rates will drop again.

Even though .5% seem insignificant, it can easily be the difference between saving money, and not benefiting from a refinance. Homeowners should take action now though if they are at a serious risk of losing their home. However, if you can wait a little, do it. The mortgage rates will be getting lower, and you can take advantage of knowing that.

-M Petrone

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