Mortgage interest rates have remained low throughout 2009. This was due to a bad housing market, bad economy, and stimulus programs launched by the Obama administration. Many homeowners have taken advantage and refinanced their mortgage. However, I think in 2010 things will change and mortgage rates will rise.

Right now, mortgage interest rates are very low due to Government interference, a bad economy, and a bad housing market. In an effort to help homeowners the Obama stimulus program also contributes to the low interest rates. This has led to many homeowners looking to refinance a mortgage in 2009.

While I do not predict that interest rates will dramatically increase, I do think they will rise by about 1.5% in 2010. While many homeowners will still be able to benefit from refinancing a mortgage, some people will lose the benefits of it due to the slight interest rate increase. I think we have seen the bottoming out of the housing market, and throughout 2010, both the economy, and housing market will recover. While the recovery may be slow, it will be positive progress.

As the market and economy improve, so will homeowners situations. Many homeowners will see the their homes equity value rise, or the value of their property and home go up. This will lead to a slight increase in interest rates due to less of a need to assist struggling homeowners avoid losing their home. Also, by the time interest rates rise in 2010, many homeowners would have already gotten a refinancing, or by this time have lost their home.

Mortgage lenders and banks will not be as hurting in 2010 as they were in 2009. This means that they will be more selective when approving homeowners for refinancing. Throughout 2009, nearly any homeowner could find financial relief through refinancing a mortgage. While many people can still benefit from refinancing in 2010, it will come at more of a cost. Right now an average 30 year fixed rate mortgage has an interest rate of around 5%. I predict that in 2010, interest rates for the same mortgage type will rise to around 6.5%. This is still much lower than many people pay, yet high enough of an increase to make refinancing a mortgage not so beneficial.

Homeowners who need to get a mortgage refinance should take action now. The longer you wait, the worse your situation will be and there is also a potential mortgage rates will rise, as I predict. Contact a mortgage lender or bank and ask about your mortgage refinancing options.

-M Petrone

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