Mortgage rates have been really low for most of 2009. However, I think that things will change in 2010, and it may be bad news for some homeowners. Here are my mortgage interest rate predictions for 2010.

Throughout most of the year, home interest rates have been around 5% for a standard 20 year mortgage. However, that was due to an extremely high number of foreclosures, a bad economy, and a horrible housing market. Also, Government programs attributed to keeping mortgage interest rates low and allowing homeowners to easily get help refinancing a home loan. I think that things will change though in 2010.

I think we have already seen the absolute bottoming out of the housing market. While things are still not in great shape, I do not think they will be getting much worse. Homeowners who are at risk of losing their home are getting help with the current stimulus programs, low interest rates, and mortgage refinancing or modification options. I think that things in the housing market will only improve, maybe slowly, over the next year.

This means that home loan interest rates may rise. I predict that in 2010 mortgage rates may go up by as much as 1.5%. While this seems small, it adds up to a lot of money over the course of a large 20 year home loan. This increase may even be big enough to make refinancing a mortgage not so beneficial for some people. However, even if the rates go up by 1.5% there is still plenty of room for many homeowners to save money.

While nothing is guaranteed I do think that things will be getting better for the housing market in 2010. However, this means that interest rates may rise. Homeowners who are at risk of losing their home should take action now. I do not things will be getting much easier for homeowners who want to refinance any time soon.

-M Petrone

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