Mortgage rates are they key to saving money when refinancing a home loan. Right now, mortgage rates are around 5.19% for the average homeowner who refinances. However, my mortgage rate predictions are that interest rates will drop a little further, potentially saving homeowners a lot of money. Here are my mortgage rate predictions, and forecasts for 2009 and 2010:

Mortgage rates are near all time lows right now. Earlier in the year, interest rates were at their lowest, around 4.69% for a typical fixed 30 year mortgage. When interest rates were that low, millions of homeowners needed help getting a better, or more affordable home loan. Homeowners literally rushed to mortgage lenders and banks to apply for refinancing. Very quickly, the lenders and banks became backed up with paperwork, and homeowners to help. To try to slow down the rush, interest rates were increased to 5.19%. While this rate is still very low, it was enough of an increase to slow down the rush.

However, now that mortgage lenders and banks are getting caught up, I predict interest rates will lower to their prior lows of 4.69%. Mortgage lenders and banks will be eager to have another rush of customers to help. To spur another wave of interest, rates will be dropped around .5%. While this may not seem like a lot, .5% can easily make or break a refinancing deal, and could be just what a homeowner needs to save a lot more money.

Mortgage refinance rates are not facts, just educated guesses. Homeowners should wait until these lower interest rates kick in to refinance. However, since interest rates are still very low, homeowners who are struggling and at risk of losing their home, should take action now. After the predicted rate drop, the interest rates will only be increasing.

-M Petrone

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