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.
There has been an astonishing surge in the amount of slick marketing and extravagant gimmicks of late by some online lenders and big commercial banks to lure new candidates in for mortgage loans. Banking has always been a competitive business, and becomes even more aggressive when home sales are down and interest rates are on the rise. Yet, there is an indirect correlation between the numbers of loans originated by these lenders compared to the amount of loans actually closed as presented. Simply put – just cuz they take the mortgage application, it doesn’t mean the loan gets to the closing table as promised.
There has also been a recent surge in the amount of online loan “portals” and new lending “apps” that allow borrowers to effortlessly submit paperwork to their lender through a touch of their fingertips. Some even tout this can be done by a child, or during a coffee-break. So cool! So efficient! So what?! I believe what is most important to a mortgage applicant is that they close the loan in a timely and efficient manner, and that they get the most favorable rates and terms that their circumstances permit. So often consumers believe that the more seamless the application process, the more favorable the rates. In fact, the opposite may be true. Erin Lantz, vice president of mortgages at the housing website, Zillow, was recently quoted as saying that you shouldn’t expect a loan from an online lender to be a “lower cost option”; “You pay for the service,” she says.
We at Approved Funding believe that we are a “best of both worlds” hybrid of the new generation of integration technology, along with the foundation of old-school relationship lending. Paramount to this practice is a process that we call “Getting Approved As Easy As 0-1-2-3”.
Step 0 – Analyze
In my opinion, one of the most critical steps of the mortgage process is the comprehensive analysis which should happen in advance of any formal application. It is during this stage that all of the quirks, concerns and obstacles should be uncovered. It is during this stage that your mortgage advisor should make the appropriate recommendations of best rates and terms considering your long term and short term financial objectives. Most banks and online “portals” fail miserably in this stage leading to a longer process, more loan rejections and inevitably higher rates and fees (if the loan can be done altogether).
Step 1 – Apply
The next step is the actual application process. Many brokers and lenders have online applications to make their life easier to get the application submitted to them. Their life might be easier, but not yours. It is during the completion of the loan application that I often find out the most important items that might prove to be a challenge later on in the process. I take all of my loan applications personally by phone or in person. This helps us ensure our astonishing pull-through numbers and loan approval ratings.
Step 2 – Approve
After the application and paperwork are submitted, an approval (“commitment”) should be forthcoming within a few days. If there are delays in getting that approval in a timely manner – find out why immediately. When issuing a commitment, we typically have a conference with the borrowers and their Attorney if need be, about all of the terms, conditions and prerequisites of getting the loan cleared for closing in a timely manner. Questions, concerns or issues are addressed at that point so that there are no last minute surprises or conditions that cannot be satisfied.
Step 3 – Accept
The most satisfying part of the mortgage process is the loan “Closing”. Rates, terms and fees are discussed well in advance, and should not be changing unless a client has been forewarned. I am shocked at the amount of delay, penalty and pain that many banks subject their customers to at the last minute – often when it’s too late to do anything about it.
Getting a mortgage is not rocket science, but not having the guidance and knowledge of a trusted advisor at each step of the way can only lead to frustration, confusion and increased expenses. Certainly a consumer would forgo the fancy “apps” for a competent “application” from the get-go. That’s something you can count on consistently with us. Coincidentally, the phone numbers for reaching Approved Funding are (201) 833-0123 and toll free at (800) 475-0123. Getting Approved is figuratively and literally as easy as calling us at 0-1-2-3 for a confidential, no obligation comprehensive analysis of your particular circumstances.
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