Mortgage rates in 2009 have been low. This is due to a struggling housing market and Government stimulus programs. However, I predict that things will change in 2010. Here are my mortgage interest rate prediction and outlook for 2010.

When refinancing a mortgage, if you get the lowest interest rate possible you will see the most benefit. Regardless of the reason you decide to refinance, the lower the interest rate, the better. Throughout 2009, mortgage refinancing was a very popular option for million of homeowners. Interest rates were low and Government bailout programs helped people get a better more affordable mortgage through refinancing. The housing market was in bad shape and foreclosures have been at all time highs. This has led to many mortgage lenders and banks being more flexible and offering more help to homeowners than ever before. Instead of letting someone lose their home, the lenders and banks wanted to help avoid having to deal with another lost home. They made refinancing easy and available to nearly anyone who wanted it.

However, I think that things will change in 2010. While not drastic, the changes will effect many people and make refinancing not very beneficial, if at all. I think that the housing market has already bottomed out. That means that home values are at, or already have been at their lowest they will be. This means a return to market stability, and home values. With that, less help will be available for the struggling homeowners who did not take action. I predict that interest rates will rise by 1.25% or so bringing an average 30 year home loan interest rate to around 6.25%. While this is still very low, it is higher than rates have been all 2009. This may seem like a small amount, but it is actually a large amount when dealing with such a large amount of money over such a long period of time. Also, Government stimulus programs will start losing steam as 2010 progresses.

This means that while refinancing in 2010 will still benefit many people, refinancing a mortgage now is probably more beneficial. Get help now as opposed to waiting. The longer you wait the worse you situation will get. Also, I predict that refinancing a mortgage in 2010 will be a little harder and more costly as 2010 goes on. Get help now.

-M Petrone

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