Mortgage refinancing in 2009 was an extremely popular option for many homeowners. However, I think that may change for many as 2010 progresses. Here are some reasons why I think it is better to refinance a mortgage sooner rather than later.

Throughout most of 2009, mortgage rates remained rather low. Much lower than many homeowners were paying for their home loan. Also, Government sponsored mortgage bailout plans offered relief to millions of people. The reality is though, many have lost their home, or are going to lose it within the next three months. This abundance of real estate and lack of buyers due to a struggling economy has led to a downward spiral in home prices. Many people owe much more than their home is actually worth leading to what is known as an upside down mot gage. However, the Government bailout offered relief to many, but few are taking advantage.

Throughout 2009, mortgage rates were low to encourage growth and stability as the market for homes bottomed out. However, 2010 may be a different story. While I think mortgage rates will remain low for the first 4 months or so of the year, I predict things will change around May 2010. This is when I think interest rates will start to rise, and this will make refinancing a mortgage less beneficial, if at all, for many homeowners.

I think that by May 2010 the banks, mortgage lenders, and housing marker will be in much better shape. I also think that the market has already bottomed out. This means that the rates available right now are most likely and hopefully, the lowest available for years to come. Refinancing a mortgage now may be a much better choice than in the future when I predict mortgage rates may increase by as much as 1.25%. While this may seem like a small amount it really adds up on a large loan over the long course of time to pay it back.

While the recovering economy and housing market will be great news overall, it will not help a lot of struggling homeowners. Take advantage of the flexible, low interest rate, and easy to qualify for, mortgage refinancing options available now. Do not count on things getter even better for you in the future. Especially if you are at risk of losing your home, you need to take action sooner rather than later.

-M Petrone

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