Buying a home can be an overwhelming experience for many people, especially when it comes to dealing with the complicated paperwork involved in the loan application and the closing process. The numerous signatures and data that need to be filled in multiple times can be time-consuming and prone to errors. However, electronic closings can simplify the process by using optical character recognition to capture and read the data.
This means that you won’t have to fill in the same information repeatedly since the captured data is automatically populated in multiple fields.
Once you have reviewed the document and are comfortable with it, you can use an electronic signature to verify the information and complete your home purchase.
Closings in the present times can be broadly classified into three types based on the use of technology. The first is traditional closing, where no technology is used beyond emails and printing.
Such a type of closing is time-consuming and involves the risk of errors. The second type is a hybrid closing, which combines traditional methods with digital tools such as eSignature.
The third type is a fully electronic closing, where digital tools are used in the entire loan cycle. In this type, people may not have to be physically present in the lender’s office.
They can verify and sign the documents electronically, and the closing process is completed through eContracting. Finally, the documents can be secured in an eVault.
Benefits of eClosings
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Like most digital tools used in the loan cycle, the benefits of eClosings outweigh the costs involved in implementing the facility. The following advantages will show how eClosings can be highly beneficial:
- Data Is Safe
When eClosing platforms are used, there is no fear of losing data to cyber-attacks. Multi-layer encryption will protect your information from being leaked to hackers. Your privacy is of utmost importance and will not be compromised with the new-age platforms.
- Saves Time
Experienced real estate agents know that closings can be painstakingly slow when done traditionally. However, when electronic signatures are used and there are no restrictions on the place from which you decide to close the home purchase, you have a higher chance of owning your home sooner than expected.
- Go Borderless
If you feel your portfolio needs diversification and an out-of-state property is the right fit with good prospects of ROI in the future and the only impediment is your ability to travel to close the purchase, then think again and use electronic closing. You will be surprised that you can close the home purchase from the comfort of your house or office.
Conclusion:
As a lender, if you are still unsure about adopting digitization in your loan origination cycle, you may soon struggle to keep up with competitors and lose your market share.
Even your most loyal customers may prefer the convenience offered by other lending institutions such as banks and credit unions. Therefore, it is not a matter of whether you need to change, but when you will embrace digital lending.
