When refinancing a mortgage, even the slightest difference in interest rates equals a large amount of money. Many homeowners are looking into refinancing a mortgage as a way to save money by getting a lower interest rate. Here are my mortgage interest rate predictions for the rest of 2010, and how I made them.

Most people who own homes know that even a little bit difference in the interest rate percentage, can mean a big difference in payments, and the total cost of owning the home. Earlier this year, mortgage rates were at historic record lows of around 4.69% for a typical 30 year fixed rate mortgage. That rate stayed the same until about 2 months ago when it increased by about .5% to 5.19%. This rate increase was expected by me, and was due to the large demand from homeowners for refinancing and home loan modification. This demand was brought on by the low rates, the high number of people in bad mortgages, and the Obama housing plan. The combination of these 3 things led to a huge amount of paperwork from homeowners looking to refinance or get a home loan modification, and led to a large amount of work. As a response to slow the applications, the mortgage lenders and banks raised rates a little. These rate increases were small enough to still help a lot of homeowners, but were enough to hold off a lot of other homeowners just looking to get a better interest rate.

My Mortgage Rate Predictions for 2010:
I think for that home interest rates will drop again later this year. I predict that mortgage rates of 4.69% for a 30 year home mortgage will be here once again. I think that this will happen sometime around October and will last until October of 2010. The rates will be lowered because the mortgage lenders and banks will be ready by then to take on a new crop of customer applications. This means that homeowners who can wait, stand a better chance of getting a better deal on their refinancing or home loan modification.

-M Petrone

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