Amid a quickly changing real-estate market and uncertain economy, many homeowners are applying for a home equity line of credit, or HELOC, to tap the value of their property. According to TransUnion, HELOC originations nationwide increased 41% in the second quarter of this year compared with Q2 2021. However, the traditional closing process is time-consuming and expensive. By using eClosings, lenders can process significantly more HELOCs in the same amount of time while providing a better customer experience.
Previously, everyone involved in the process – lender, homeowner, notary and attorney – gathered around a table in a single location to hammer out a deal. The logistics of an in-person meeting with so many people often meant scheduling weeks ahead of time. The travel time for all parties, including the lender, added to the processing time and limited the number of HELOCs that could be managed in a week.
With an eClosing, either the entire process is digitalized for a full closure or a portion of it – such as the signing of a document – is completed online. During the signing portion of an eClosing, the homeowners access all documents online and then sign electronically. Next, the signatures and documents are notarized online with a service such as that offered by www.notarize.com. This eliminates travel and saves time. Lastly, the promissory note is signed and filed electronically in the form of an eNote.
With HELOC volumes increasing, lenders are turning to eClosings to reduce time and costs. The top benefits of eClosings include:
With the increase of HELOCS, now is an ideal time to start using eClosings. Many lenders begin by adding online notarization through Notarize.com as a first step toward digitialization. After seeing the benefits of moving even a single process online, lenders often begin using a hybrid eClose process and then move to a full eClose. And because homeowners find the process less cumbersome, they are likely to share their positive experience with their friends who may also be considering HELOCs.