Should you deal directly with the bank? Should you deal with a mortgage broker? We all know what banks are and what they do, but few of us know precisely what a mortgage broker does and what the differences might be.

The disadvantage of dealing with a bank is that you are dealing with one source only. If, for some reason, you do not qualify or the bank does not have a loan that suits your particular situation, you must start all over with another lender. The loan officer at a bank does not have to be licensed by the Department of Real Estate, as does a mortgage broker, because the bank is using its own money. For this reason banks do not broker loans, except from a wholesale division, dealing with mortgage brokers. The loan officer of a bank is also an employee of the bank and therefore represents the bank.

A mortgage broker has contacts with wholesale lenders and is licensed by the Department of Real Estate. The broker, in effect, buys the money from the wholesaler at discount prices and lends it to you. The broker must meet the rigid standards of the lender, both financially and in their work methods, in order to be approved by them. The mortgage broker is ultimately responsible for the loan should fraud be proven.

The mortgage broker actually represents the borrower by packaging the loan to highlight the borrower’s strengths and minimize the weaknesses. A wide array of programs is offered, with competitive rates, fixed and adjustable. The broker shops for the best rates and can move a “problem” loan from one lender to another. Mortgage brokers, or the loan

You often see loans offered with no points, or no costs and no points. This means that the interest rate is lightly higher than the best available rate, and the broker is being paid a substantial amount by the lender. The broker can then pay some or all of your costs, depending on the amount the lender is paying for that particular rate.When you refinance, you are able to add the costs to the loan. With a purchase, you do not have this option. Today, however, there are loans available with no down and it is allowable to have someone else pay your non-recurring closing costs: A seller, parents in a gift form, etc. Non-recurring costs are just that — they are generated one time only. These fees would include processing, points, etc. Interest is an example of a recurring cost and it would be paid by the borrower.

Pricing is received daily by the mortgage broker, sometimes twice a day. This pricing is affected by what is happening in the nation and even the world. Employment numbers, the stock and bond market, retail sales, the Consumer Price Index, existing home sales, etc., all have an influence on interest rate pricing. You have a choice of locking in a rate or jumping in at a certain time, when it is felt that the pricing is particularly favorable. The length of time of the lock can also be reflected in the pricing.

How a loan is repackaged can determine whether or not the loan is approved. It is important to choose an experienced mortgage broker who comes highly recommended, is someone with whom you feel confident and who has a good track record. Good mortgage brokers want to build an ongoing relationship so that you will use their services again and recommend them to your friends.

I cannot believe anyone would propose such a law as Proposition B! This proposition proposes to limit the size of rural properties to 40 and 80 acres, regardless of the topography of any other factor that is currently considered when planning or building. This proposition does nothing short of rob landowners of their rights without any redeeming or apparent benefit to anyone. Proposition B does not lesson traffic in the cities, nor does it provide any water for the cities.

It has been said that voters, in general, really do no care about anyone’s property rights. In fact, landowners are perceived as wealthy people who do not deserve to be considered at all! When one invests in land, a lot of research goes into it. What is the zoning? What is the General Plan?

If the use of this land is taken away today, what about your house tomorrow? Do not forget that some of the parcels of land have houses on them and the passage of this proposition would limit that person’s right to do whta he had the right to do when he bought it! What if I decided I wanted five feet of the perimeter of your property and that of your neigbors’ so that I could make it into a horse trail for anyone who would want to use it? Does that sound preposterous? San Diego Country Estates was developed that way, but people knew it when they bought it. That’s fair! The first scenario is not.

Some proponents of Proposition B choose inappropriate and inciteful words when explaining their position; they say our beautiful back country will be overrun by “rampant growth” and “shopping malls” if we do not pass their proposal. This could never happen.

There are not enough people in those areas, nor would there ever be, to support any such development. There is no sewer or city water. The cost to bring those improvements in would preclude significant development.

Much of this land is so remote it is not even seen by the public, yet the owners — who will be expected to continue paying taxes on the land — would see its value depreciated by this proposition that hides under the beautiful words of “Save Our Rural Heritage and Watershed.”

Proponents bemoan the loss of the orange groves of the 1940s that subsequently gave way to development. Well, where would our people be living today if the orange groves I remember on Pepper Drive in El Cajon were still there? Some of you would not be in your current homes.

If you look around, you will find that there are new orange groves springing up in various areas. Actually, the marketplace is the determining factor of growth and of type of growth. Housing growth will continue, but it will not be in our mountain area, which is the area singled out in this proposition. We must focus our energies on transportation and building the highways to support the populace.

I find it ironic that Duncan McFeteridge, the man behind Prop. B, enjoys living on a 2-acre plot in Descanso. The truth of it is, many years have passed since anyone could live on a 2-acre parcel in his area. Each rural community has a planning group and its input is given to the county. These groups also develop community plans that can override zoning.

Land use planning should be based on common sense, not emotion. Protero, Tecate, Campo, etc. could develop into nice little communities under our present planning structure, but under this initiative, forget it!

Why should our people be forced to move to Idaho or Wyoming to enjoy a 10-, 20- or 30-acre site? By the way, you should all venture out to those other states to appreciate the planning that we have here.

Leave land use planning to our Department of Planning and Land Use and the small, affected communities that have always been in the best position to protect their own interests. Please be guided by common sense when you go to the polls. Should this proposition pass, it will certainly be challenged in the courts on constitutional grounds.

It is difficult to understand why individuals think lenders will give them credit or a decent interest rate even though they have a history of late payments, collections, charge offs (debts written off by the debtor) and even bankruptcy.

Many lenders these days rely on a credit score (FICO) when evaluating applications. Scores may be based only on information in your file at the credit bureaus or on a combination of credit bureau data and information you supply on a credit application. The way you have handled credit in the past gives a strong indication as to how you will manage credit in the future. While credit scores cannot predict with certainty how a person will act, they do provide a quick, accurate and objective estimate as to how likely you are to repay according to the terms of a loan.

Scoring programs are: Beacon at Equifax, Empirica at Trans Union and the TRW/Fair, Isaac Model at TRW. The Fair, Isaac Bureau scores range from approximately 450 to 850 points, and one needs at least 660 to qualify for a loan covering 97 to 100 percent of value.

Scoring has been around since the 1950s and credit bureau scores based solely on credit bureau data became available in the 1980s. Not all loans require FICO scoring.

Elements of a scoring model:

• Recent payment history
• The amount of credit you have access to and are using
• How long a credit history you have
• Whether you have been shopping for credit and
• Notification of collection and public record items such as liens and bankruptcies

If you have been turned down for credit, you are entitled to a free copy of your credit report. Even if you have not been turned down, it is a good idea to know your credit status and to correct any erroneous information. Your request for a copy of the report will not affect your score in any way and if there is an error, the credit bureau will investigate and respond to you within 30 days. Telephone numbers are:

• Equifax: 800-685-1111
• Trans Union: 610-690-4909
• Experian (formerly TRW): 800-682-7654

Credit items are updated frequently, so new items can pop up since a previous report. Unfortunately, repeated requests for credit reports may cause the score to drop.

Over time you may improve the information on your credit report by paying all your bills on time and using credit wisely. As derogatory data in a credit report gets older, the score will be affected less. A missed payment four years ago will not affect the score the same as a missed payment six months ago.

It is important to remember that the scoring is not done to calculate a debt ratio but is simply an indication of the consumer’s historical credit use habits.

Scores by themselves do not identify individuals as “acceptable ” or “unacceptable” customers. They are just one of the factors lenders use when deciding to make the loan. The final decision depends on the individual lender.

Some will figure that since you’re not paying a commission, they should be able to get your price down a bit more. Others will be like you, choosing not to avail themselves of professional help that can make their biggest (and most important) shopping experience easier by providing priceless advice.

Would you represent yourself in court? They say only a fool acts as his own lawyer.

There also are some costs you may not have considered. Besides having to advertise, which is not inexpensive, you must make yourself available at all times. How else can you show the house? You’ll have to answer all kinds of telephone calls, including some from real estate licensees who want to convince you that you’re making a big mistake.

You’ll also not get the advantages of the Multiple Listing Service. This valuable tool — which isn’t available to private parties — tells 9,000 agents who already represent people looking to make a purchase that you have a property for sale.

And when an agent lists a property, agreements negotiated by Sandicor (the real estate MLS service) also assure that the listing goes on the Internet — with only the agent’s name and telephone number. That means you get fantastic coverage without the hassle of dealing with all the people who just want to know a little more about your home before deciding whether they’re interested.

Agents also bring you the benefits of daily networking, and they regularly attend meetings where they discuss specific properties with other licenses they know, from past experience, may have clients who’d be interested.

Are you educated as to the paperwork that sellers are obligated by law to furnish? The rule today is disclosure, disclosure, disclosure — transfer disclosure, lead paint disclosure, etc. Since June, there’s been a requirement for Natural Hazards Disclosure.

Do you know what retrofits your town or city requires as a condition of sale? Do you know what is required by the State of California? Will you know how to answer all your buyer’s questions?

Some people believe, erroneously, that an escrow company can solve problems that may arise during a transaction. They do not understand that an escrow agent, in reality, is a neutral third party who takes direction from those involved in the sale; he or she is not supposed to give advice.

Real estate is one of the few professions in which people invest large amounts of time, effort and even money with no assurance they’ll ever be paid for their service. If they do not deliver, you pay no commission. One really has to love this business to put up with all the uncertainties.

The purchase and/or sale of a home is the largest and most complicated transaction most people make in their lifetimes. It is difficult under the best of circumstances and can be absolutely hellish when poorly handled.

That’s why it makes sense to spend your time and effort finding a good professional to handle your transaction — then sitting back and letting the agent do what he or she has been trained to do.

Begin by searching for an agent experienced in the residential market, as opposed to one who specializes in leasing commercial property or selling businesses.

Ask for references. Do others feel this agent is capable? How do those in related businesses (escrow, title, etc.) feel about the agent? When you are given references, take the time to call those people and ask questions.

Look at the agent’s background. What kind of education has he or she had? any special designations, awards or other recognition?

Do not make the mistake of selecting an agent just because he or she will accept a reduced commission to obtain the listing. You get what you pay for, and no one gets a dime until the property is sold.

Real estate agents work out of all types and sizes of offices: Small, medium, large and even one-person offices. Bells and whistles are great, but remember that you are putting yourself and your property into the hands of just one person — the listing agent. This is the person who controls your listing, deals directly with you, and represents you under all circumstances. You want to be sure the agent is hard-working and dedicated.

When you do list your property, listen to the advice of your agent when pricing the property. An agent has comparable sales that can be analyzed to determine the best price for your property. Do not deliberately overprice. You will lose many potential buyers. They may be long gone when you finally reduce the price.

You may want to know the difference between a Realtor and a real estate licensee. All Realtors are real estate licensees but not all real estate licensees are Realtors. A Realtor is a member of a trade organization that adheres to a special code of ethics and strives for professionalism in the industry. Some issues that develop between real estate agents and customers may involve practices that are unethical, though not illegal. The Realtor has a venue in which these issues can be settled.

The Realtor is pretty up to date on legislation that affects the industry through his or her affiliation with both national and state associations. Realtors also have access to a “legal hotline” that enables them to quickly obtain opinions about questions of law that may develop about a transaction that is being or has been negotiated. Belonging to a trade organization that fosters professional growth and provides the tools, services and products to achieve this goal shows a willingness and a seriousness to be the best that one can be.

In most businesses the recipe for success is service, price and quality. A real estate licensee is successful if the recipe is service, service, service! Service in dealing with the consumer, service in marketing the product, and service in successfully closing the transaction. In many cases, that service will continue long after the transaction and the agent will be called on the next time a real estate professional is needed.