E-closing on a mortgage, explained
Quick insights
- E-closing allows some or all mortgage closing documents to be signed electronically, offering convenience and speed.
- E-closing methods vary by state and may include remote online notarization, hybrid or in-person electronic notarization.
- E-closings are often preferred for their convenience but may still require some in-person steps, depending on state rules.
In general, the mortgage closing process involves signing a myriad of papers that signify the transfer and ownership of a home to the borrower. Traditionally, this step takes place in person, but closing on a mortgage online, or e-closing, is becoming increasingly popular in part due to an increase in completing tasks remotely.
As families look to relocate, they may also want faster ways to close on a new property. E-closing can be a much faster, and sometimes even more helpful way of finalizing a mortgage. For example, if any errors are found in the document, they can be fixed quickly to move the closing process along. The term e-closing, however, can be a bit deceptive since there are steps that may still need to be completed in person.
If you’re looking for a potentially faster, more informative and user-friendly way of closing on your mortgage, e-closing may be for you. E-closings are not available in all states.
How does an e-closing work?
E-closings are not one size fits all. Each one is unique to its state guidelines, and the preference of both the borrower and lender. As we mentioned, an e-closing mortgage lets you sign closing documents electronically, but there are still some documents that require the old-fashioned pen and paper.
Should you choose to use a real estate agent or attorney, they’ll help lead the closing process and check to see what’s permitted in your property’s state. Or you can find a closing agent to help you through the closing process.
If your state does allow for e-closings, there are a few different ways to go about them:
- Remote online notarization (RON): RONs are the least common form of an e-closing because the documents are all signed virtually with an online notary via video call.
- Hybrid: A hybrid e-closing happens in-person with a notary. Some documents require pen and paper and others are signed electronically.
- In-person e-notarization (IPEN): With this option, you’d meet your notary in person but sign everything electronically.
How do you “e-sign” a document?
There are a few different ways you can e-sign a document, but before you’re permitted to sign, your notary will need to confirm your identity. If you’re doing a RON, you’ll show a license or other government ID on a video call. For hybrid and IPENs, you’ll show the notary your ID in person.
Once your identity is confirmed, you can move forward signing the documents. You’ll probably sign your documents in one of these three ways:
- Type your name into the form.
- Draw a signature using your mouse or touchscreen device.
- Add a computer-generated signature with the click of a button on the signature line.
Is e-closing better than closing in person?
Although most e-closings still have in-person components, many people prefer them over traditional closings. Rather than having someone talk you through a document, you have it all in front of you on your device of choice. Borrowers often find this format more convenient and easier to follow. E-closings also limit any unnecessary face-to-face contact. Overall, it depends on what you’re most comfortable with and what your state allows.
Whether you’re a first-time homebuyer or a mortgage veteran, e-closings are a convenient way to virtually sign some (or all) of your closing documents and send you on your way with your new home loan.
