Mortgage rates are near all time lows right now, which is great for homeowners looking to refinance. However, I predict that throughout the rest of the year, mortgage interest rates will rise. Here are my mortgage interest rate predictions for 2010, and how I made them.

Right now a 30 year fixed rate mortgage can be obtained for around 5% interest rates. This is very low, and half of what interest rates were just 10 years ago. The mortgage rates are so low due to a bad economy, a bad housing market, and Government stimulus plans. Rates need to remain low to stabilize the market, enable homeowners to right their financial situations, and avoid foreclosures and defaults. The low rates are enabling many people to get a mortgage refinancing that will save them money, their home from being lost, or both. There are actual signs that homeowners are getting help, and that the housing market is recovering. This means that interest rates will rise.

I predict that mortgage interest rates will rise by 1.75% by the end of 2010. This is not a dramatic increase, but is enough to negate the benefits of mortgage refinancing for some, and will make refinancing cost more for everyone. This rate increase is a good indication that the economy is improving but will ultimately mean that homeowners who refinance will pay higher interest rates, no matter the situation. I also predict that the increases will start sometime in April of 2010, and gradually increase throughout the end of the year, resulting in a 1.75% increase. I think that this will happen because of a better housing market. Millions of people are getting mortgage refinancing's and saving a lot of money by doing so, this is leading to an improved housing market, and homeowners with a little more money. This means that interest rates are inevitably going to increase as mortgage lenders and banks look to increase profits.

Homeowners should take action now and get a mortgage refinancing at the current near record low interest rates. The longer people wait to refinance a home loan, the more expensive it will get. Do not wait for interest rates to get any lower, they are not. Take action now and refinance a mortgage before it gets more expensive.

-M Petrone

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