Today, the home-buying experience is increasingly digital. Offers and addendums are signed digitally, buyers send deposits electronically, and communication happens over email. However, an increasing number of title agents and lenders are also shifting more manual processes in the final closing stages, including the notarization of documents, to fully-digital methods. It’s good news for buyers and sellers alike.
Here’s what homeowners need to know about the eClosing process.
In a traditional closing, everyone involved in closing a mortgage meets with a notary in-person to sign and finalize the paperwork. Buyers, sellers, the real estate agents for both parties, a notary, and attorneys all travel to the closing.
Some mortgage closing documents must be notarized, such as the mortgage itself. A notary is traditionally present to confirm the identity of the people signing legal documents, walk through and present the documents to the signers, and identify and avoid any fraud or coercion.
With eClosings, all closing documents are processed, signed and notarized online through an eClosing platform. This makes it more convenient for buyers and sellers to finalize their documents, and also helps to eliminate issues with scheduling the closing, since you don't have to rely on finding an available notary.
There are two types of eClosings. The closing process can happen both online and in-person (hybrid eClosing). Or, you can complete the entire closing process digitally (fully-digital eClosing). Let’s take a closer look at both.
Hybrid eClosing: The actual mortgage closing and notarization still occur in person, but all parties can sign other closing documents electronically rather than with pen and paper, saving time at the closing.
Fully-digital eClosing: The entire closing process happens digitally. Parties sign all documents electronically. They use an eClosing platform such as Notarize to securely connect with a notary, eSign and notarize their documents, and electronically file the eNote. (An eNote is an original electronic promissory note signed on an eClosing platform and registered with the MERS eRegistry upon execution.)
Buying or selling a home is a stressful time. eClosings can remove the stress of needing to appear in person at a closing, allowing parties to sign and notarize required documents from anywhere. In addition to convenience, eClosings can also provide:
Homeowners may have to do some searching to find a lender who offers a fully-digital eClosing option. While lenders are increasingly offering eClosing options, some still require the notarization process to be completed in person, as opposed to switching to online notarization. While hybrid eClosings do speed up the closing process, fully-digital eClosings provide the most time savings and are more convenient.
Another roadblock can be whether or not a specific property eligibility is for eClosing. Ask your lender or real estate agent to confirm whether an eClosing is possible.
Homeowners should ask their real estate agent and lender if eClosing is a possibility for their property. The ability to close digitally through an eClosing platform like Notarize provides a safer, quicker, and more convenient closing process for all parties involved.