5 Reasons Online Closing is Better for Lenders and Customers
Since the early 20th century, Americans have sat down at a table to sign the closing papers for their home mortgages. Over the years, the traditional process has become somewhat ceremonial in nature. The papers are drafted, signed, and notarized — when the ceremony is complete, the happy customers leave with the deed to their property.
But with the traditional process also came additional frustrations for lenders and customers alike. Real estate agents, sellers, closing attorneys, and other parties must arrive at a perfect time to meet and facilitate transactions, often struggling to work with conflicting schedules. Meanwhile, customers may feel rushed and overwhelmed at signing, especially when presented with piles of paperwork by complete strangers.
As the consumer world has moved more and more to the digital sphere, traditional lenders have struggled to provide a lending experience that is just as convenient as other electronic retailers. Some have adapted to the demand by creating digital lending as an option — to great results. A study by Brandessence Research found that the digital lending platform market size was growing at 15.6% CAGR (Compound Annual Growth Rate), with a projected value of $20,671.8 million by 2027. It’s unlikely that this trend will slow down, especially in light of the COVID-19 pandemic, which has forced lenders to limit their in-person meetings with customers.
Fortunately, like so many other conventions from the previous century, the mortgage closing process has received a digital update. The modern online closing process helps customers achieve their dreams of homeownership, while eliminating the inconvenience of in-person signings and maintaining the sense of excitement that comes with finalizing a major transaction.
Here are five ways that digital progress has changed mortgage closing for the better:
1. Improved lender and customer convenience
The top benefit of online closing for lenders and mortgage customers is convenience.
Eliminating another trip to the bank reduces stress on busy customers and gives them more control over their timeline. Online closing can also happen asynchronously, with each party signing the documents at their leisure. This is more in line with other modern consumer experiences, and makes it just as easy as depositing a check online.
2. More breathing room for customers
Through the online closing process, customers can find more time for themselves to review documents line by line instead of rushing through it at the closing meeting.
Signing for a mortgage is a major life decision, and customers will have more time to carefully think about what they are agreeing to before signing on the dotted line.
3. Cost savings gained through efficiency
In the traditional closing process, both loan officers and customers must take the time to drop everything they’re doing to go to a closing meeting in person. With mortgage signings moving online, that no longer has to be the case.
Instead, a positive byproduct of digital mortgage closing is more time for both the lenders and borrowers to spend on other important tasks, inadvertently saving them money in the process.
4. Lower resource and administrative costs
Traditional mortgage closing procedures not only waste time for all parties, but they also waste resources. Signings require physical papers to be printed, in addition to space to store it. The physicality of such forms also means they can easily be misplaced or damaged, which means that everybody must re-complete the whole process over again should anything happen to the papers.
By moving everything online, these signed forms will be accessible with just a simple mouse click.
5. A more streamlined mortgage experience
Talk to a million different lenders and you’ll probably get a million different ways that they conduct their closing operations. For borrowers, this added variability can add unnecessary confusion to an already bewildering process.
Switching these operations to an online format can lead to a more streamlined process by conforming to everybody’s preferred closing methods — leading to a more organized step-by-step closing process for everyone involved.
Go digital with online closings from Roostify
Because laws can vary greatly across state lines, lenders need to work with vendors who understand the regulatory landscape in full detail. Knowledgeable vendors can work with lenders to ensure full compliance with all applicable laws.
To learn more about how to seamlessly integrate online closing technology into your digital mortgage experience, contact us here!