A. Subprime guidelines have been rolled back about three years. You're going to be paying a down payment. You're going to have to save up your money, document your income, maybe wait a little bit. Understand that it's going to be OK for someone to look at your bank statement. Depending on the loan amount, consider an FHA loan. That's not subprime, but their credit guidelines are relaxed. Of course, that is also a full-doc loan.

A jumbo buyer should consider a hybrid and refinance down the road. Take the higher rate but keep your acquisition costs low. The change in interest rates is going to affect your payments more than someone with a smaller loan. Do some shopping.

Q. What's the most important thing someone shopping for a mortgage right now needs to know?

A. Know whom you're working with. If you're working with a broker, find out who the lender is going to be. Brokers should have no trouble telling you where your loan is going. If you've never heard of them, you need to ask more questions to find out if it's an alternative loan.

Stay away from any type of payment-option loans. Just get a fixed rate. Rates have been at historic lows. People got talked into these 1 percent pay-option arms. Temporarily they look good, but in the long term, they're a disaster.

People should also think about having some equity, at minimum 3 to 5 percent.

And read everything closely. This stuff is so confusing to borrowers. The disclosure language is just dismal.

Q. Should anyone take an ARM?

A. Every loan has its place in the market. If you know you are going to move in a few years, take out the ARM and enjoy that lower rate. Even interest-only has its place for a person who is paid irregularly. You pay extra toward your principal when you get your bonus or royalties.

Q. Anything people should be on the lookout for?

A. Don't work with a mortgage loan person you don't know. I'm all for marketing, but get a referral. And remember that mortgage loans are a commodity. One lender doesn't have a coup on the magic loan program. So choose your loan program, then don't vary from your loan choice as you make comparisons.

And don't panic. Yes, 30 percent of loan products have been taken off the market. But every day, people are closing loans — conventional and FHA. That's still there and makes up the bulk of loans.

In certain pockets of the country, prices are depreciating, but that also means they are now available to people who couldn't afford them before.