Many people have been applying for a mortgage refinancing due to the insanely low interest rates available now. However, I do not think that these low interest rates will last for much longer. Here are my mortgage rate predictions for 2010, how I made them, and how they affect homeowners.

Getting right into it, I predict that in 2010, mortgage rates will rise by around 1.75%. This means a standard 30 year fixed rate mortgage would have a fixed interest rate of around 6.75%. While this is still incredibly low, the interest rates available right now are even lower. The key to saving money when refinancing or getting a mortgage modification is reducing these interest rates.

Many people are aware that rates right now are near record lows, and are applying in record numbers for refinancing and mortgage modification. However, there are still many homeowners who are either waiting for rates to get even lower, or who are convinced that they will not benefit from refinancing or mortgage modification due to bad credit or other financial problems. However, according to my predictions, I think waiting to refinance will end up costing you more money, regardless of your finances.

Why do I think that predict mortgage interest rates will rise? Well that is because I believe that the housing market, and overall economy has seen its roughest days. I think that while it may be slow, many people will be in a better financial position in 2010. As things get better, interest rates will rise. The only reason they are so low right now is to spur activity, and help homeowners prevent losing their home to foreclosure or default.

While a 1.75% mortgage rate increase does not seem like a big deal, the truth is that it adds up to a lot of money over the course of a 30 year mortgage. This slight predicted rate increase will though make refinancing a mortgage not so beneficial for many people. However, even a 6.75% interest rate is very low. It is low enough that millions of people will still benefit from refinancing or mortgage modification.

While every situation is different, many people would benefit more from refinancing a mortgage now as opposed to waiting. Millions of homeowners will see a huge reduction in monthly home loan payments by taking advantage of the near all-time low interest rates. Consider refinancing a mortgage now before my predicted mortgage interest rate increases take place.

-M Petrone

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