Types Of eClosing And How They Work
Author:
Kevin GrahamApr 18, 2024
•6-minute read
The entire world has gone digital. Mortgage paperwork doesn’t have any reason to be different. Home buyers and those looking to refinance have probably come to expect digital transformation in real estate. And with that, eClosing brings mortgage closing into the 21st century.
What Is eClosing?
An eClosing is a mortgage closing process that involves signing digital documents in place of paper ones. This is either accomplished through electronic signatures over a computer or mobile device, or physically signing documentation on a tablet in the presence of a notary.
Many mortgages now feature an eNote, which is an electronic version of the promissory note containing the loan terms under which the borrower agrees to pay back the mortgage. However, even if the mortgage note itself isn’t an eNote, also sometimes referred to as an eMortgage, you would still be able to sign certain documents electronically in a hybrid eClosing.
Your Client Care Specialist will let you know what to expect in terms of documentation you need to have for your closing process. This will include identification. It’s also important to note that state and local laws vary, but Rocket Mortgage® offers hybrid eClosings in all 50 states.
Types Of eClosing
When lenders refer to eClosing, they’re really talking about one of a few different closing, or settlement, procedures. While we’ll get deeper into the various types of eClosing below, here’s a table that will help you pick out some of the key differences at a glance, with a comparison to a traditional closing included for reference.
| Traditional Closing | Hybrid Closing | In-Person eNotarization (IPEN) | Remote Online Notarization (RON) | |
|---|---|---|---|---|
|
Description |
Hard copies of all paperwork completed in person |
Meet notary in-person to sign some final physical documents; some digital documents may or may not be e-signed in advance. |
All documents are digitally signed in the physical presence of the notary |
Documents are signed electronically in a secure, all-virtual experience |
|
Documents |
Paper |
Paper and digital |
Digital |
Digital |
|
Devices |
None |
Personal or agent device |
Agent device |
Personal and agent devices |
|
Notary |
In person |
In person |
In person |
Connected via videoconference |
Hybrid eClosing
In a hybrid eClosing, some documents are signed digitally. Others require a physical John Hancock on paper, also referred to as a “wet signature.”
In some cases, you may be allowed to sign the digital documents ahead of time, allowing for a more streamlined process on closing day. If your state and local rules allow for this, your lender will contact you ahead of your closing. Documents requiring a physical signature will be signed on closing day in the presence of a notary.
In-Person E-Notarization (IPEN)
During an IPEN closing, you’ll meet a notary in person. The key difference is that all of the documents signed are digital. The notary will bring a device for you to use in the signature process, typically a tablet.
Remote Online Notarization (RON)
During a RON closing, you’re remotely connected with a notary via videoconference. All documents are e-signed. The thing setting this apart from IPEN is the ability to close from anywhere. No need to leave the beach in Hawaii if you can find an internet connection. In this way, you can think of RON as being a full eClose.
Right now, Rocket Mortgage offers RON in states and counties that support it. The option is currently available for certain refinances.