Moderator: Welcome to Viewpoint with our guest, Andrew Horowitz. Andy, we're glad to have you back, and let's get started.

Fairfax, Va.: I'm closing on a house July 14. I was wondering if you predict interest rates to climb, hold or lower from now until then? I'm trying to decide wether to "lock" now or hold until then.

Andrew Horowitz: It's great to be back. I really enjoyed the last one and looked forward to revisiting this atmosphere. In regards to whether or not interest rates will be lower for a July 14th closing date, that's a tough question. No one can really predict the interest rate market that we are presently in; the Fed has lowered interest rates several times this year only to see the yield on treasuries and mortgages actually increase. Although this is not the desired effect, this is what has happened. The consensus is that the Fed will continue its easing bias as soon as next week. I do not believe that this will have any real bearing on mortgages though, as it might cause a rally in the stock market which may cause a sell-off in the bond market. My suggestion is rates are low, how low do you think they are going to go? Lock in the rate today.

Beltsville, Md.: Maybe you can offer some advice ... I want to buy a single-family house. I can sell my condo and clear about $40,000. I've got some money in the bank saved but I don't want to wipe out my savings. Should I just put what I think I will clear on the condo on my loan application, or should I add the savings account too? How much will that affect how much money a lender will offer me?

Andrew Horowitz: The amount that you are showing in your bank account would actually assist in your loan application. Banks like to see reserves after closing; if you are showing significant assets aftrer purchasing the house they may look more favorably on your application. This does not mean that you have to put any additional funds down, it just shows the bank your true strength.

Washington, D.C.: How do I get rid of my mortagage insurance? Is there a Web site for information? I bought a $70,000 condominium years ago, make mortgage payments via direct deposit and earn $36,000.

Andrew Horowitz: Mortgage insurance by law now must disappear once you have achieved a 20 percent equity position in your property. You should contact the mortgage company and request a new appraisal. Provided the value has appreciated, you can use that equity to help offset the mortgage insurance.

Arlington, Va.: In this super-crazy market, how important is it to present yourself to the seller with the correct mortgage? I've heard that if you do an FHA, you might seem less "desirable" than someone who could do a 80/20 loan.

Andrew Horowitz: Not really. Although neither of these is seen as the plain vanilla loan, sellers should not really balk. The only downside of FHA is the appraisal issues, but if the property is in satisfactory condition and the roof is okay you should not have any problems.

Baltimore, Md.: Could you explain the FHA "buy down" mortgage? Sad to say, I have one but don't really understand it. As I understand it, during the first year, my interest rate was 5.5 percent, this year it's 6.5 percent and starting next month it will be locked at 7.5 percent for the remainder of the mortgage. Does that sound right?

Andrew Horowitz: Exactly, you understand it better than you thought. Excellent job on the interest rate as well.

Baltimore, Md.: How long should it take for a company to process my paperwork for a mortgage?

Andrew Horowitz: In this haphazard market we are telling clients a minimum two to three weeks for processing time. Some mortgage companies are working with less, but if the interest rate is locked in for a long enough period of time this should pose no real concerns. If there is a need we can get purchase loans done in about a week to 10 days.

Reston, Va.: How do you know if a mortgage company is reputable?

Andrew Horowitz: There are many different ways. You can contact the department of banking for the state to check and see if there are any complaints. Try the Better Business Bureau, although many of today's mortgage companies are not even listed. Ask for references and check them out.

Eliot, Maine: I have $11,000 remaining on my 30-year mortgage. My fixed intrest rate is 7 3/4 percent and I have five years remaining on the mortgage. Should I entertain the thought of going to a different rate? I plan to retire in five years.

Andrew Horowitz: A big NO. Don't even pick up a phone and waste your time.

Raleigh, N.C.: How do you overcome the fear many mortgage-seekers have of ARMS? Thanks.

Andrew Horowitz: In today's market the fixed rates are so low, why would someone entertain an adjustable rate? If I had my druthers I would lock in for 30 years rather than have to worry about rates over the course of the next five years.

Silver Spring, Md.: Hi and thanks for any advice you can give me. Question -- My sister and I want to purchase a home together. How is the best way for us to obtain a mortgage, and how can we split the property taxes, interest payment, etc., so that we can both get a tax write-off?

Andrew Horowitz: I think this is more of a question for your accountant. I really don't feel comfortable answering this.

Centreville, Va.: I'm currently working on some credit issues but would like to buy a home. The debts will be paid off in six months. How soon after will I be able to purchase a home and what should I expect as an interest rate? I would like to do so with a good mortgage company.

Andrew Horowitz: There are actually new programs from both FNMA and FHLMC that allow for credit issues. You may consider talking with someone now, rather than wait. Even if you get a slightly higher interest rate today, it might be better than the rate you get in six to nine months.

Washington, D.C.: We just bought our first home, which we plan to keep for seven years at the most. What is the best mortgage plan for us? We have enough cash for a 20 percent down payment. We are considering a 7/1 ARM for a first deed for $275,000. This will keep us out of the jumbo loan range. Should we get a second loan for the remainder and use our cash for investments, or should we use that cash to pay for the remainder of the house?

Andrew Horowitz: Excellent idea, with interest rates as low as they are. I have been recommending people take out seconds rather than use their own. Even in this falling investment era, eventually things will turn. I would look at either a 7/1 ARM, a seven-year balloon, or even a 30-year fixed. If the differential in rate is a quarter percent or less it might make sense to take the 30-year. If you would like, feel free to call in to my office after the discussion and we can go over rates for all of the above. 1-800-784-1331

Washington, D.C.: I bought a condo in October 2000 in D.C., a first time homeowner program with three percent down, 8.25 percent interest rate, no points and no PMI. A friend who bought just a few months before has already refinanced because her value went up in the crazy D.C. market. Am I correct to assume that to avoid PMI in a refinance, that I need to make sure I am at the 20 percent equity level (not so at purchase, but with escalating condo prices in the District, who knows now)? What is the cheapest way to get a new appraisal?

Andrew Horowitz: Not at all, you can utilize a second mortgage to cover any of equity short of 20 percent. We have been doing loans like these all year; it makes no sense to pay PMI, especially with our seconds at seven percent right now.

Powell, Ohio: How can you truly compare rates and fees between mortgage lenders? I have looked at several online lenders and it seems that some will charge a "processing" fee while others do not, or another fee will show up called something else that another lender does not show. It seems like lenders can get away with charging anything and calling it some kind of "fee"!

Andrew Horowitz: Ask for good faith estimates. But also be careful of those -- there are some lenders that are offering initial GFEs and then final GFEs two or three days before closing.

Stafford, Va.: My husband has rather poor credit. Although my credit is new, I have kept several accounts in good standing for a year. My husband's debt is from before we met, and I am slowly trying to help with that. He is a stay-at-home Dad of our two young children, and I gross about $30,000 annually . We would like to purchase a townhouse in the fall in our area. Should I apply by myself for the loan, and how will his credit affect me? Thanks!!

Andrew Horowitz: If your husband's credit is poor, apply by yourself. He does not bring anything positive to the table and will only bring you down, thus your rate would be higher.

Cypress, Texas: I live in Texas. Can I get a loan from you or do I need to shop for it in my local area?

Andrew Horowitz: We can do loans in Texas.

Alexandria, Va.: Do you have any recommendations for writing a "winning contract" in today's market? We've been in five multiple contract bids already (and lost all five), though we've been bidding OVER list price. Does the amount of money down make a difference to the seller? Should it?

Andrew Horowitz: Have you been pre-approved? That is always a benefit. The amount down should not be a deciding factor until you say you have been bidding over the asking price. Once you start to go over ask, appraisal issues arise. Mortgage companies will only lend a percentage of appraised value, so if you offer $10,000 over ask and the house appraises for ask, then the amount down becomes significant.

Lanham, Md.: I have found several homes that I am interested in. What is my next step?

Andrew Horowitz: Contact a mortgage company and get pre-approved. Then put in an offer. The problem you may have is that many mortgage companies are not doing pre-approvals due to the high volume of refinance loans in the pipeline. Best of luck.

Oxon Hill, Md.: Hi there! I am ready to buy a house. I have no credit card bills and my car is paid off. I live at home and don't pay any household bills including rent. My credit is outstanding and I have about $20,000 in savings. Am I a risk because I don't have a current history of paying rent? I make between $60,000 to $70,000 and I am under 30 years old. Am I in a good position to purchase a home? Thanks in advance.

Andrew Horowitz: I would not consider you a risk at all. As a matter of fact, I would like to do your loan. Feel free to call if I can be of assistance.

Woodbridge, Va.: I had to file for bankruptcy because I was in business for myself and it didn't go well. What type of mortgage will be best for me? Will I get a higher interest rate because of the bankruptcy? The bankruptcy was discharged in the early part of 2000. Thanks.

Andrew Horowitz: You will definitely pay a higher interest rate with a bankruptcy that's recent. If you can hold off for another year you might be able to be approved for a loan through FNMA. They have become more lenient over time, although a large down payment would help, say 15 to 20 percent.

Laurel, Md.: I've got some offers from lendingtree.com. Some of them have low percentage rates, but high points and closing fees, and some are higher percentage rates, but no points and "reasonable" closing fees. What is the best way to compare the offers?

Andrew Horowitz: Sounds like you have been through both sides of the points game. If you are planning on staying in a property for a minimum of five years then you pay points, if not don't pay points. Simple as that.

Manassas, Va.: Do you know of any programs that would help low-income individuals without perfect credit purchase homes?

Andrew Horowitz: FHA programs and state bond issues are available. Contact the state to see if they have any special home buyers programs.

Woodbridge, Va.: We've got our builder's mortgage company as a backup, but we're still shopping around. What do you consider a "good" loan rate/point ratio? Our goal is about 6.75 percent with no points. We can't lock in until August/September. Are we being realistic?

Andrew Horowitz: I am not sure if you will see 6.75 percent with no points again this year. If you can lock in an interest rate at seven percent with no points that is something I would take at this time. Just beware of the broker fee deals that are available from various lenders; these are points, but not called points.

Bethesda, Md.: I'm tempted to work with a broker to which my airline frequent flyer program refers me so I can receive miles upon closing the deal. But I don't know the broker and not sure how to learn to trust him/her. Ideas? Avoid this route? It's similar for a mortgage company - Should I work with the one my airline frequent flyer program suggests so I get miles or just use my bank of 20 years and be safe?

Andrew Horowitz: You really have to go with your opinion. I am not sure if receiving miles for purchasing a home should be your priority. You really want to make sure that you are buying a home at the best possible price and in a condition that is satisfactory to you. As far as mortgages are concerned, I would check out both options. If you go through the recommended company find out what rate would they offer and compare with a rate offer by local bank and other mortgage companies.

Lorton, Va.: What are your thoughts on the smaller (lesser-known) lenders/brokers? I'm thinking it's safer to go with an established place and pay a higher rate than go with a dot com.

Andrew Horowitz: It all depends on what you consider to be lesser-known. Some of the lesser-knowns are actually very reputable. It is but a few that are giving the industry a sour face at the moment, and it seems as if those are the ones everyone is hearing about.

Washington, D.C.: Is there usually a pretty good chance of approval following pre-approval? Does the lender call fairly quickly if there is any problem during the application check?

Andrew Horowitz: The only way that we do a pre-approval is by going through the full approval process, so once you are pre-approved here you have a full-blown commitment letter in hand and are approved. Not all lenders work in this fashion but they should be following some form of procedures and ratios to insure your being approved.

Washington, D.C.: I bought a condo with a three-year ARM, about three years ago. Now my interest rate has gone from around seven percent to over nine percent, and I'm thinking that refinancing is probably in order. The problem is that due to a long and torturous set of conditions that I won't go into, I had to declare bankruptcy two years ago come October. I've had a credit card company give me a $5,000 limit card recently, so obviously I'm not in the financial/credit black hole I thought I was. I've never bounced a check, never been late with a mortgage payment, and have plenty of money in the bank. My question is, do I have ANY chance of being approved for a refinance (with a decent, not usurious interest rate), or should I just stoically bear the burden of my high interest mortgage?

Andrew Horowitz: Wait until October and then call me; you should be able to be approved at that point. If there is a story to go along with the bankruptcy then you might be approved even now. If you'd like, call me and we can discuss it further. 1-800-784-1331

Campbell, Calif.: I read in the newspapers that lenders often times not only inflate some of the closing cost charges but also add charges for something else, which may not be valid charges. I'm sure there a lot of us who do not know of what a standard closing cost should consist. My questions: Aren't the lenders subject to government audit? If this is the case, which government office do we go to for advice or review of our documents? Do you know of a Web site that calculates mortgage amortization, as we enter the actual payment data in order to ensure the statement data submitted by the lender is accurate? I would find it very helpful.

Andrew Horowitz: Mortgage companies are subject to state law. Although the audit process is helpful, it does not seem to be the answer to the question. My advice to you is to compare GFEs from about three or four different mortgage companies and see what they are all charging. You may be surprised to notice that two or three will be competitive. If you have questions, although I really don't do a lot of loans in California, feel free to call and I will do my best to answer any and all.

Alexandria, Va.: Why do some lenders charge an origination fee in addition to the usual fees? It seems like shameless gouging to me. Also, can you share what are "real" fees and which are junk fees? Thanks.

Andrew Horowitz: For normal mortgage companies right now expect to pay anywhere between $300 to $400 for application fees, and anywhere between $350 to $600 for other mortgage company charges. If a borrower is paying points, the points should be broken down into origination and discount. So a bank charging origination is not gouging; it is how we get paid.

Gaithersburg, Md.: Are there really any true no-doc loans, i.e., no income verification, no employment verification, no asset verification, etc.? Only requirement is name and Social Security number.

Andrew Horowitz: There are true no-docs avalable. You just have to search and pay for them.

Chevy Chase, Md.: Is there a "rule of thumb" or formula to help calculate/estimate closing costs?

Andrew Horowitz: Sorry, but there is generally no "rule of thumb" to calculate closing costs. Just compare GFEs and make sure you are comparing apples to apples.

Washington, D.C.: My boyfriend and I would like to purchase a home in the District. We make $70,000 combined, but my worry is that since he has another mortgage with his brother as an investment we can't take another. We also have a new car loan and some college loans, but virtually no credit card debt. How long should we wait and are we likely candidates? Thanks so much!

Andrew Horowitz: The invesment property would not be considered a negative and should not detract from your ability to purchase a new home. You sound like excellent candidates and should have no trouble being approved. Just pick up a phone and call.

Reston, Va.: Should I re-finance now or wait until the fall?

Andrew Horowitz: Personally, I would be looking at refinancing now. Rates have come back down, and I really don't foresee much-lower rates even in the fall.

Andrew Horowitz: Thank you all for the well-thought out questions. I hope I answered them as thoughtfully and to your acceptance. If you would like any further assistance, feel free to call my office anytime as I am pretty much always here. Just reference this discussion and I will instruct my employees to put you through. Again, if I didn't plug my telephone number enough it is 1-800-784-1331. Thanks again.

Moderator: Our thanks to Andrew Horowitz, The National Financial News Services and all who participated.