The Arrival of E-Closing
By now, the integration of new technologies into a long-established process should not surprise anyone. As more people become comfortable with digital capabilities and their security and reliability increases, so does their expansion.
The mortgage industry is no exception. What once required submitting a detailed paper application can now be completed online, via a mobile device. Communication with your originator often takes place through email, and documentation is uploaded to the cloud. Driven by these advances and, in some cases, an emphasis on social distancing, technology is now transforming the final stages of a real estate transaction.
What is it?
An electronic mortgage closing, or e-closing, is a broad term that describes the digital signing of documents during the real estate closing process. It’s intended to streamline the event and minimize the expenses and logistics required to complete a closing successfully.
While the term e-closing may conjure up images of finalizing your home purchase without leaving your bed, that’s unlikely to be the reality. Instead, there could be more similarities between an e-closing and a traditional one than you might expect.
Options May Vary
The specifics of an e-closing will vary depending on the lender and the state laws governing the transaction. Currently, there are three types of closings that fall under the e-closing umbrella.
- Hybrid e-closing: Much like a traditional closing, you’ll meet with a notary in person to sign the required documents. The only difference is that at least some of the documents will be presented to you electronically and signed digitally. Other forms will still require putting pen to paper.
- In-person e-notarization (IPEN): Again, this option will require a trip to the title office or an in-person meeting with a notary. However, there will be no paper documents, only digital signatures on electronic versions.
- Remote online notarization (RON): A limited number of states have approved a fully-remote closing experience. If available as an option for you, your interactions with the closing agent will take place via video chat, and only digital signatures will be required.
Regardless of the type of e-closing, there are reasons to consider opting for the digital supplement when it is available. Fewer paper documents to sign will make it simpler to close remotely when a client’s geography is an obstacle.
Also, digital-signing software can reduce human error, preventing an overlooked signature or initial. Digital documents can make it easier for signers to review pages in advance and speed up the process. As e-closings gain in popularity, the time and expenses involved with the closing are expected to decrease.
Open Mortgage is expanding its e-closing options and will continue to provide our clients with the industry’s best lending experience. Browse our website or call us today to learn more.