Mortgage interest rates are currently near all time lows due to a bad housing market and a struggling economy. Many homeowners are refinancing a mortgage now to take advantage of low rates and Government stimulus programs. However, I predict that things will change in 2010 and interest rates will go up. Here are my mortgage rate predictions for 2010, and how I made them.

Currently, a typical 30 year fixed rate mortgage can be had for around 5%. This is much lower than many homeowners are paying for their home loan. This has led to a massive rush of refinancing applications from homeowners looking to take advantage. Also, new Government stimulus programs have been keeping interest rates low and offering struggling homeowners a refinancing option to save money, their home, or both. While it sounds bad, the struggling economy and housing market are actually benefits for many struggling homeowners. That is because as a result, interest rates have dropped, and Government stimulus programs make getting approved for refinancing easier than ever.

With money being pumped into the housing market and banks to keep interest rates low, I predict that things will change in 2010. While interest rates in 2010 will still be very low, I predict that they will rise by 1.5%. This means that a typical 30 year home loan would have an interest rate of 6.5%. While this is still a very low rate, the interest rate increase will be enough to make refinancing a bad option for some homeowners. However, many people will still benefit from refinancing, even with a 1.5% rate increase.

I think that the housing market has seen its worse days, and things will start to improve in 2010. While the rate of improvement may be slow, it will be better. This will lead to interest rate increases and less impact from Obamas stimulus programs. While refinancing may still be a good thing for many, some will realize that with the interest rate increase, the benefits of refinancing are little to none.

Homeowners should take action now and refinance a mortgage before rates increase. Getting approved for a mortgage refinancing right now is easier than ever before. Take advantage of the low interest rates and Government programs and improve your finances, save money, or save your home.

-M Petrone

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