Getting a mortgage involves many steps, each laden with paperwork. Now, time and hassle is minimized due to most lenders offering online applications.
However, borrowers – refinancers and home purchasers – still often attend the “closing” whereby mortgage funds are dispersed and purchases finalized.
Still, your physical presence may not be required even at closings, which require notarized signatures. Twenty states allow “e-Notarization” whereby one electronically signs from wherever he is in the presence of a notary, and five states allow remote notarization, whereby notaries electronically witness someone electronically signing from another location, notes Georg Gerstenfeld of DocuSign.
Here, some benefits – aside from savings trees – to electronic borrowing:
• Zap Documentation
Instead of supplying pay stubs, bank statements and the like, online applications let you scan and submit.
Moreover, much of the documents retrieval can be done for you. “With the permission of the consumer, lenders can obtain employment, income and asset information from trusted sources and present it to the consumer for their confirmation,” explains Rick Hill of the Mortgage Bankers Association.
It’s often only if a borrower is self-employed that he’ll need to scan income tax statements, or if a borrower is divorced, send a copy of the divorce decree, says John Schleck of Bank of America.
• Check Status Easily
Borrowers want to ensure their loan is coming through, and lenders’ systems should allow you to check whether documentation is in. Human contact with a loan officer should be available if a hitch develops.
• Take Time to Read
Ironically, while online applications streamline borrowing, a fully electronic process that includes the closing gives borrowers more time to read what they sign, since they aren’t faced with a stack of papers to review at a closing office, finds a study from the Consumer Financial Protection Bureau.
Whether online or in-person, consumer advocates stress a slow, thorough read.
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