Mortgage interest rates are the key to saving money on a home loan refinancing. The good news is that right now, mortgage rates are very low, enabling many people to benefit from a mortgage refinance. However, I predict that by the end of 2010, mortgage rates will have risen and that could take away the benefits for some, and it will make everyone pay more, when refinancing a mortgage.

Its actually good news that I predict mortgage rates will rise in 2010. Rising interest rats generally mean a market is growing, or recovering in this case. However, for the individual homeowner looking to refinance, any interest rate increase takes away some of the benefits of refinancing. For some people, after all the closing costs and other fees are paid off, a refinance may not even be a good thing to do because of the predict increase in interest rates in 2010.

Why do I think interest rates will increase in 2010? Well I believe the housing market has seen its low, and will slowly start to recover throughout 2010. I believe that enough homeowners are refinancing and taking advantage of Government stimulus programs that the housing market will stabilize, and get a little better. This will also be a result of a stronger economy, and better financial prospects and situations for nearly all homeowners. This will also cause home values to rise again, though not to the levels we saw 5 years ago.

My mortgage rate predictions are that interest rates will end up being 1.75% - 2% more than they are currently at. While this increase will not come all at once, it will start to rise sometime in April and end around November. Smaller rate increases of .25% or so will take place until the total predicted increase is achieved. This means that I predict that refinancing will be more costly, and maybe harder to get approved for, the longer a homeowner waits to do it.

The longer homeowners wait, the better the market will be. That means mortgage lenders and banks can start getting more selective about their requirements for borrowers, and it certainly means that refinancing a mortgage, regardless of your finances, will cost more. A 2% increase in interest would mean a typical 15 year refinance would be at a fixed rate of 7%. While this is still low enough for many people to save money, it is actually a lot more than the 5% rates available now for the same loan type.

Homeowners should take some time and think about refinancing a mortgage now before my predicted rate increases take place. It is almost certain that interest rates will not be getting any lower than the near record lows they are at now. Homeowners are advised to take action, if they can, and refinance now to ensure the best deal, and biggest savings, possible.

-M Petrone

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