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E-closing on a mortgage, explained

minute read

    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 more and more popular in part due to COVID restrictions.

    As families look to relocate, they may also look for 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, it can be a quick fix 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 in-person.

    If you’re looking for a potentially faster, more informative and user-friendly way of closing on your mortgage then 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 is one with the opportunity to 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 document 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. Many people find this format more convenient and a bit 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 vet — 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.


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