Last week, mortgage rates for a 30-year fixed loan dropped below the 5 percent mark, and shorter term adjustable rate mortgages remained in the mid-4 percent range.  Combined with the availability of the federal home buyer tax credit, the new mortgage rates have helped push home affordability to an all-time high.

The Fed’s announcement that they will buy back additional current and delinquent loans through Fannie Mae and Freddie Mac helped to reduce rates to current levels and will likely increase loan dollars among originating banks.

Overall, rates are expected to rise and buyers interested in taking advantage of the perfect storm for purchasing a home will have to act fast and get into contract before the tax credit runs out on April 30, 2010.

To qualify for the tax credit buyers must follow these guidelines:

• the home must cost less than $800,000
• the home must be intended as the buyer’s primary residence
• To earn the full credit, the buyer’s income must be no more than $125,000 per year individually, or $225,000 a year if filing taxes jointly with their spouse.

First time home buyers can apply for a credit of up to $8,000 and those who have had ownership in a home for the past 36 months can apply for up to $6,500.

To take advantage of this rare opportunity for home buyers, take your first step toward getting the most competitive loan available by completing a request form at LendingTree.

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