Is Mortgage Lending Back?

Dear Ali: I bought an apartment in 2005 with a 6.5 percent mortgage, and now that rates are lower, I'd like to refinance it. Is it true that loans are easy to get again?
A: The answer to that is the same as the answer to "Is today a good day for baseball?" It's opening day, at least for my beloved New York Mets. In some cities the sun is shining and it's a great day for a ball game, while in others it's raining cats and dogs.

Similarly, while the Wall Street Journal recently trumpeted that "Jumbo Mortgages are Back," if you want to borrow money in Pittsburgh, you don't care what the weather is like in Peoria. If you're thinking of refinancing, check out my fellow blogger Ilyce Glink's "Is Now the Time to Refinance?" But whether you're buying afresh or refinancing, ask your mortgage lender the following questions:

• How much equity do I need? The original asker of this question was my dental hygenist (I have one of those professions where people ask you questions everywhere). The answer for her was yes, refi money is available, but since the required equity percentages have increased, refinancing in a down market may not be a "deal." If you originally bought with 10 percent equity, and the bank now wants 25 percent, be sure that you've got enough money in the deal to go forward.
• Do I need a conforming, high-balance conforming, or jumbo loan? Mortgages now come in three sizes instead of two, so it's kind of like Neapolitan ice cream. If you can slide right in under a limit -- currently $417K for conforming and varied by state for high-balance conforming -- you'll get the best rates.
• How long is this gonna take? As a mortgage broker said to me, "the banks fired everybody." So now that applications to refinance are on the upswing -- up 41.5 percent on the Federal Reserve's announcement that it would buy both Treasury notes and mortgage-related securities, you have half-a-dozen poor beleagured employees in the back, trying to move everybody's applications. If you're buying outright, make sure your financing contingency reflects the extended processing time.