Shmuel Shayowitz (NMLS#19871) is President and Chief Lending Officer at Approved Funding, a privately held local mortgage banker and direct lender. Shmuel has over two decades of industry experience, including licenses and certifications as a certified mortgage underwriter, residential review appraiser, licensed real estate agent, and direct FHA specialized underwriter. Shmuel provides a uniquely holistic approach to comprehensive real estate and financial matters that goes well beyond any single transaction. Shmuel is an award-winning financier recognized for maximizing the short-term and long-term objectives of his client. As a contributing writer to many local and regional newspapers and publications, his insights have been featured in the media for many topics, including mortgages, personal finance, appraisals, and real estate trends.
It is always so impressive to see how diligent people are when it comes time to rid their homes of chametz. Some are so meticulous that they sell their entire home altogether and fly down to Florida to ensure they are not near their forbidden crumbs. Jokes aside, it is undoubtedly a holiday where everyone works conscientiously to adhere to the strict guidelines of making sure they don’t discover even the slightest scraps over Pesach.
Indeed, it is commendable when people are vigilant and attentive about compliance to halacha at all costs. Diligence is vital in many aspects of life. In business, I pride myself on helping a client navigate through all the complexities of purchasing a home or obtaining a refinance – well beyond a simple rate quote. It’s thrilling to help them when they ask complex questions about the intricacies of their personal situation and seek guidance on their specific needs. I appreciate every opportunity to save them money as if it were my own.
One thing I never understand, however, is when the effort to save money is disproportionate to the benefit it yields. For example, I vividly recall how a woman called me to compare mortgage rates for her upcoming home purchase. She asked all of the standard questions and then proceeded to more advanced queries that most first-time buyers would not know to ask. I commended her on her competence, and she told me that she is a managing director at a large hedge fund that invests in mortgage bonds. She was very proficient with how pricing and margins work on the front-end of things.
We spoke shop for a while, and she promised to call back after she talks to a few more lenders to compare the various offers adequately. Her next call came a few days later when she shared with me a detailed spreadsheet that she created after speaking to six lenders and documented their rates and fees. Qualification was not a concern as her salary plus bonus was close to seven-figures, and they had money in the bank to buy the home all-cash twice-over. It boiled down to the rate, and the bank fee, or cost, to get that rate. She applauded me for being the most knowledgeable of all the mortgage professionals she spoke with, but apologized, because she chose another company whose fee was about $500 less than mine.
Having given her my best offer, I wished her the best of luck and moved on to the next client. Later that night, I realized that she must have spent at least twenty hours speaking to all the other lenders and me. I estimated that her hourly income was probably 10x more than the money she actually gained while chasing a few dollars of savings. Again, I applaud diligence and pursuit of the best deal – but I often wonder at what length and cost some people go.
There are many instances of this type of behavior when “shopping” for the best deal. I had a client who sent me his mortgage statement looking for a refinance quote and told me about the proposals he was getting elsewhere. Before I even told him what I could offer, I asked him why his homeowners insurance was so expensive. He told me that he had three refinances over the past few years and never did someone question that. My diligence helped him save over $1000 a year – plus the mortgage savings he got by working with me.
As the saying goes, too often, people are “penny wise and pound foolish.” It could be as simple as accommodating a closing in the late evening or on the weekend, so someone doesn’t have to take off work and lose a day of pay – things people don’t think about initially when they choose a lender. It could also be as delicate as coordinating a simultaneous close coinciding with a home sale or lease expiration, so they don’t have to pay extra rent or moving penalties. Oftentimes, I help people avoid storage fees and rate lock extensions – so much of which they never anticipate when penny-pinching upfront in the “rate shopping” stages. The lesson here is that it is always admirable to chase every crumb and every penny – but equally as important to be mindful at what cost or what loss that will entail. Wishing all of you a Happy Passover!
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