Mortgage E-Closing: What Home Buyers Need to Know

You may be ready for an e-closing on your next real estate transaction, but e-closings might not yet be ready for you. At least, not in the way that you envision.

Most mortgage e-closings still require in-person meetings. So if you’ve pictured e-closing as something done completely online from the kitchen table, that's probably not how it's going to go.

Even so, an e-closing is likely to proceed faster than a traditional mortgage closing, and you're probably going to be better informed about what’s happening every step of the way.

What is an e-closing?

"An e-closing is a loan closing where at least one document is signed electronically," Rachael Sokolowski, president of Magnolia Technologies, an information technology consulting firm, said in an email.

The mortgage closing, or settlement, is the process in which a home buyer and seller review and sign the documents to finalize the loan and transfer the property. Up through the 20th century, settlement documents were paper and signed in ink.

Now, in the 21st century, the most important closing documents still are usually signed with ink on paper. They include the promissory note, transfer deed and deed of trust or mortgage. Documents of lesser importance — such as the Closing Disclosure and escrow disclosure — are more likely available in digital form, to be signed electronically.

As Sokolowski pointed out, it counts as an e-closing even if you make just one electronic signature and use a pen to make all the others.

» MORE: What escrow means in real estate