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Mortgage E-Closing: What Home Buyers Need to Know
An e-closing involves signing mortgage documents electronically. It may still require a face-to-face meeting.
Some or all of the mortgage lenders featured on our site are advertising partners of NerdWallet, but this does not influence our evaluations, lender star ratings or the order in which lenders are listed on the page. Our opinions are our own. Here is a list of our partners.
Holden Lewis Senior Writer/Spokesperson | Mortgages, homebuying
Holden Lewis is a mortgage reporter and spokesperson who joined NerdWallet in 2017. He previously wrote for Bankrate, where he wrote about mortgages and real estate during the housing boom and bust. He has written articles about mortgages since 2001, and enjoys explaining complex topics to regular people who don't buy houses every day. Holden has been president of the National Association of Real Estate Editors and has won numerous writing awards. He splits his time between Jupiter, Florida, and Fort Worth, where he is renovating the house where he spent his high school years so he can move back and be a Texan again.
Mary Makarushka Assigning Editor | Housing market trends, mortgage rates, homebuying and selling
Mary Makarushka is a former editor on the Home/Mortgages team at NerdWallet. She was previously managing editor of Bloomberg Personal Finance and has also held editing positions at Entertainment Weekly, The New York Observer and Manhattan, inc. For the University of Wisconsin-Madison, she was in charge of health communication strategy for the campus throughout the H1N1 influenza pandemic.
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.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
Min. credit score
500500
Min. down payment
3.5%New American Funding works with down payment assistance programs in 14 states, including California, Texas, Florida and Illinois.
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NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
Min. credit score
580580
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3.5%First-time home buyers may qualify for 3% down mortgages at Rocket.
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NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
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620620
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0%Veterans United offers VA loans for as little as 0% down.
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NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
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620620
Min. down payment
0%On VA loans, NBKC offers down payments as low as 0%.
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4.0
NerdWallet rating
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
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500500
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3.5%New American Funding works with down payment assistance programs in 14 states, including California, Texas, Florida and Illinois.
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NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
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3%NBKC offers conventional loans for as little as 3% down.
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NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
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3%Rocket Mortgage offers conventional mortgages with as little as 1% down.
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NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
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3%New American Funding works with down payment assistance programs in 14 states, including California, Texas, Florida and Illinois.
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NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
4.5
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NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
Min. credit score
580580
Min. down payment
N/ANew American Funding works with down payment assistance programs in 14 states, including California, Texas, Florida and Illinois.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
Min. credit score
580580
Min. down payment
N/ANew American Funding works with down payment assistance programs in 14 states, including California, Texas, Florida and Illinois.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
Min. credit score
500500
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3.5%New American Funding works with down payment assistance programs in 14 states, including California, Texas, Florida and Illinois.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
Min. credit score
580580
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3.5%First-time home buyers may qualify for 3% down mortgages at Rocket.
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NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
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0%Veterans United offers VA loans for as little as 0% down.
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NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
Min. credit score
620620
Min. down payment
0%On VA loans, NBKC offers down payments as low as 0%.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
4.0
NerdWallet rating
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
Min. credit score
500500
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3.5%New American Funding works with down payment assistance programs in 14 states, including California, Texas, Florida and Illinois.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
Min. credit score
620620
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3%NBKC offers conventional loans for as little as 3% down.
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NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
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3%Rocket Mortgage offers conventional mortgages with as little as 1% down.
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NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
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3%New American Funding works with down payment assistance programs in 14 states, including California, Texas, Florida and Illinois.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
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NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
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580580
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N/ANew American Funding works with down payment assistance programs in 14 states, including California, Texas, Florida and Illinois.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
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N/ANew American Funding works with down payment assistance programs in 14 states, including California, Texas, Florida and Illinois.
There are three types of e-closings, says Bill Banfield, executive vice president of capital markets for Quicken Loans:
Hybrid e-closing. "The borrowers and notary meet in person, and they sign some documents digitally and they sign some documents traditionally," Banfield says. Most e-closings are of the hybrid type.
In-person e-notarization, or IPEN. The borrower and notary public meet face to face. All the documents are digital and are signed electronically on a tablet or computer and digitally notarized.
Remote online notarization, or RON. All documents are signed electronically, and the borrower and notary meet by webcam instead of in person.
When you hear "e-closing," you might imagine a remote online notarization, where you meet virtually and not in person. But RONs are a minority of closings because most states haven't updated their laws to allow them.
As of January 2020, 14 states had fully implemented remote online notarizations. Of the five most populous states, Texas and Florida had implemented RON, while California, New York and Pennsylvania had not. Even in states that allow them, remote online notarizations may not yet be the dominant closing method.
🤓Nerdy Tip
In response to the COVID-19 pandemic, some states have temporarily relaxed their regulations to allow remote notarizations. Some of these states still require the documents to be signed on paper instead of electronically, but the notarizations may be performed via webcam. See a list of state emergency actions on the National Notary Association website.
What happens at an e-closing?
Traditionally, your signature consists of handwritten squiggles on a line printed on a sheet of paper. The oft-used industry term is "wet-ink" signature.
Electronic signatures are different, and not just because they're dry. An electronic signature is applied to a digital document on a tablet or computer.
You may electronically sign by:
Typing your name.
Adding a snapshot of your signature by clicking a mouse or tapping a tablet.
Tracing your signature with your finger on a tablet or pad.
These are the most common types of electronic signatures, Sokolowski said.
Whether the closing is conducted face to face or remotely, the notary must confirm your identity. In person you might be asked to show your driver's license or other government identification.
When meeting by webcam, you might be required to hold your ID in front of the camera. Or you might be asked questions, based on your personal and credit history, that only you would know how to answer off the top of your head.
How e-closings benefit mortgage borrowers
Someday, remote online notarizations might be the norm, and borrowers will be able to e-close from wherever they want. When that happens, the top benefit of e-closing will be convenience.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
Min. credit score
500500
Min. down payment
3.5%New American Funding works with down payment assistance programs in 14 states, including California, Texas, Florida and Illinois.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
Min. credit score
580580
Min. down payment
3.5%First-time home buyers may qualify for 3% down mortgages at Rocket.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
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0%Veterans United offers VA loans for as little as 0% down.
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NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
Min. credit score
620620
Min. down payment
0%On VA loans, NBKC offers down payments as low as 0%.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
4.0
NerdWallet rating
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
Min. credit score
500500
Min. down payment
3.5%New American Funding works with down payment assistance programs in 14 states, including California, Texas, Florida and Illinois.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
Min. credit score
620620
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3%NBKC offers conventional loans for as little as 3% down.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
Min. credit score
580580
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3%Rocket Mortgage offers conventional mortgages with as little as 1% down.
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NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
Min. credit score
580580
Min. down payment
3%New American Funding works with down payment assistance programs in 14 states, including California, Texas, Florida and Illinois.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
4.5
NerdWallet rating
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NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
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580580
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N/ANew American Funding works with down payment assistance programs in 14 states, including California, Texas, Florida and Illinois.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
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580580
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N/ANew American Funding works with down payment assistance programs in 14 states, including California, Texas, Florida and Illinois.
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NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
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500500
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3.5%New American Funding works with down payment assistance programs in 14 states, including California, Texas, Florida and Illinois.
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NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
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3.5%First-time home buyers may qualify for 3% down mortgages at Rocket.
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NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
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0%Veterans United offers VA loans for as little as 0% down.
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NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
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0%On VA loans, NBKC offers down payments as low as 0%.
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4.0
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NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
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500500
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3.5%New American Funding works with down payment assistance programs in 14 states, including California, Texas, Florida and Illinois.
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NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
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3%NBKC offers conventional loans for as little as 3% down.
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NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
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3%Rocket Mortgage offers conventional mortgages with as little as 1% down.
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NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
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3%New American Funding works with down payment assistance programs in 14 states, including California, Texas, Florida and Illinois.
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NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
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NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
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N/ANew American Funding works with down payment assistance programs in 14 states, including California, Texas, Florida and Illinois.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
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Until then, the biggest advantage for borrowers may be an improved understanding of the mortgage process.
In 2015, the Consumer Financial Protection Bureau conducted a study "to explore whether the use of e-closing technology combined with more time to review closing documents with embedded educational tools can help consumers navigate the closing process."
The bureau concluded that borrowers in e-closings understood the closing process better. They got their disclosure documents earlier, giving them more time to review the paperwork. E-closings took less time, too.
With e-closings, the electronic documents include tracking mechanisms to ensure the delivery, receipt and acknowledgment of documents, Sokolowski said. There's less paper or no paper, which reduces shipping and storage costs for lenders. And they go faster, too.
One other benefit of e-closings: Electronic documents can't be submitted with a missing signature. On a paper document, a missing signature might not be detected immediately, causing headaches and delays.