Less than a year ago, experts everywhere, from the Federal Bureau of Investigations to the Federal Reserve, questioned appraised values of homes. Now, as the boom wanes, lenders are more certain mortgages are backed by accurately valued collateral.

That doesn't mean lenders aren't still going gangbusters on riskier, high-leverage loans for those who qualify even if income, employment and asset documentation aren't checked.

Along with housing market change comes mortgage market change in a symbiotic -- sometimes nightmarish -- relationship of ebbs and flows that can leave consumers tossing and turning at night.

Pull your credit report. Before you shop for any credit, pull your credit report from the only federally sanctioned free service, AnnualCreditReport.com. You don't have time for surprises. Know what the lender will know before the lender knows. You may need to make changes to your credit report, housing budget or timing, depending upon what you find.

Mortgage money shop. Shop several or more lenders and loan programs, as well as title and escrow fees, online and off to get the best deal. To make the best comparison, compare all loan costs whenever possible including rates, points, brokers fees, originating fees, yield spread premiums, recording feeds, title and escrow costs, everything that will wind up on the HUD-1 Settlement Statement.

Mortgage rate locks, for home buys, refinancing and equity taps, are always wise, especially during market shifts. Right now, they are crucial because experts expect the upward trend in interest rates to resume.
Freddie Mac reported on October 31 the average fixed interest rate on a 30-year conforming loan dropped to 6.44 percent by the end of August, the sixth consecutive drop. The 2006 peak was an average 6.8 percent in July. The average rate was 6.21 at the beginning of the year.

A rate lock takes the uncertainty out of which way rates are moving or even where they are, because it's a lender's guarantee your mortgage will come with a specific interest rate, points and other terms. Get the lock in writing and lock in as many costs and terms as possible, including the lock's effective date, expiration date and any post-lock options, should the lock expire before the deal is done.

A preapproved mortgage goes hand in hand with the rate lock. Get preapproved with a bona fide, carved-in-stone preapproval that guarantees in writing a loan amount, interest rate and as much of the other loan terms as possible.
Prequalification only indicates you are creditworthy enough to obtain a loan and lets you know how much the lender is willing to lend you, which could be more than you can afford.

With a preapproval, instead of shopping around with a nebulous loan amount, you'll be shopping for a home with a mortgage and along with personal satisfaction, it will give you a negotiating edge with the seller who'd rather not deal with slouches.

For current homeowners, take control of your equity and use it wisely to boost, not bust your home value. Any equity loan, by nature, is an equity depleting loan.
Take cash out primarily for capital improvements (not all home improvements are created equal) that will help hold or improve the value of your home, especially during times of flat and falling home values.

Fundamental advise is to tap your equity for well-investigated business opportunities, education and other investments that give you a return equal to or better than the cost of equity loan. Debt consolidation can be a wise use of equity provided you plan to actually pay off the debt and close, in writing, consolidated accounts.

Edwina Baniqued