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Overview of remote closings
The real estate industry has traditionally leveraged in-person mortgage closings until recent years. The emergence of new technologies now allow you to close on your new home without being physically present. This innovative closing process is what the industry calls "remote closings," "electronic closings," or "eClose."
Different types of closings
Some lenders offer electronic closings, but you may still need to be there in person for part of the ceremony. Be sure to ask your lender about their electronic closing options. CapCenter categorizes closings into four categories:
- Full Electronic Closings are exactly as they sound. They offer a completely digital closing experience. You can electronically sign all documents from the comfort of your home.
- Hybrid Electronic Closings allow you to sign most documents online. However, you may need to sign some documents requiring a notary in-person at the closing attorney’s office.
- Witness Only Closings are similar to Hybrid Closings. A notary will travel to your home and witness your in-person signature of the mortgage note.
- In-person Closings require you to be physically present to sign all closing documents.
Technology used in remote closings
Your lender or closing attorney should provide access to tools that enable an electronic closing.
- E-signature (eSign) Software: a portal that allows you to read, review, and sign necessary mortgage documents.
- Video Conferencing Software: an online meeting software that connects you with a notary to verify your identity and witness your signature of critical documents. This is otherwise known as Remote Online Notarization, or RON.
- Document Portal: a secure online portal where you can access all of your signed mortgage documents.
What parties are involved in a remote closing?
All remote closings require the following individuals to be present:
- All borrowers
- A licensed notary
The following individuals may attend a remote closing ceremony as needed:
- Your closing attorney
- Your loan officer
- Non-borrowing co-owners
Your remote closing may not require all individuals to sign in the same session.
Pros and cons of remote closings
Remote closings have many benefits, but they also come with drawbacks. Remote closings may not be suitable for everyone. This includes people with limited computer or internet access, and those who are not tech-savvy.
Benefits of a remote closing
- More convenient: Remote closings allow you to sign your documents from the comfort of your own home.
- More flexible: Remote closings may allow borrowers to sign documents at different times, reducing the stress of coordinating schedules.
- More secure: Remote closings reduce the risk of printed copies being lost or stolen, enhancing security.
- Faster access: Remote closings eliminate the process of scanning wet-signed documents and provide you with quick access to your signed mortgage documents.
- More eco-friendly: Remote closings help eliminate wasted paper.
Drawbacks of a remote closing
- Limited availability: Some states do not offer full electronic closings (RON), but most states at least permit hybrid closings.
- Higher technology demands: Electronic closings require reliable access to a computer equipped with a web camera and internet access.
- Less personable: The remote nature of electronic closings may not appeal to those who prefer in-person interaction.