Mortgage eClosings making refinancing easier than ever

Lenders and title companies are increasingly partnering with tech companies to create remote mortgage closings.  (iStock)

The need to stay socially distant amid the coronavirus pandemic resulted in the increased emergence of digital mortgage closings, allowing both lenders and prospective home buyers to complete the real estate transaction from just about anywhere with an internet connection. In addition, more lenders are becoming certified for remote online notarization (RON), allowing them to sign closing documents without the need to be physically present with a notary.

In fact, a new bill was recently introduced in Congress that would legalize RON in all 50 states. Diane Tomb, CEO of the American Land Title Association (ALTA), said that by passing the SECURE Notarization Act, "we can take a much-needed step into the future by modernizing the notarization process with a secure system that has proven to meet consumer needs and expectations."

The Mortgage Industry Standards Maintenance Organization, or MISMO, announced it now has 14 tech platforms that have completed the its RON certification. That's a reported 40% increase in three months, and means that those firms are now verified and prepared to perform fully digital closings.

As closing becomes simpler through the utilization of electronic signatures, you may want to consider refinancing your home loan into a low-interest rate so that you can save money on your monthly payment. Visit Credible to compare your options and find a mortgage lender that best fits your needs. When going through the pre-approval process, simply ask your lender about their eClosing capabilities. 

ONLINE MORTGAGE CLOSINGS COULD SOON BECOME LEGAL THROUGHOUT US: WHAT TO KNOW

How does RON affect my mortgage refinance? 

MISMO’s RON standards allow buyers, sellers or homeowners that are refinancing sign documents in front of a webcam after asking identity-verification screening questions. This allows notaries to collect signatures online without having to meet in person or go through stacks of paperwork.

"According to ALTA's Digital Closing Survey, the COVID-19 pandemic was a driver for RON requests," Tomb said. "Of all RON closings, most were from the seller side of the transaction (40%), followed by cash deals (23%), refinances (17%) and purchases (14%).

The standards by MISMO provide a common set of requirements that create best practices for notarizing remotely, including how to analyze credential and borrower identification as well as how to capture and store a RON notarization recording from the remote closing. These standards are meant to help increase the ease of electronic notarization while protecting against potential fraud.

"Companies increasingly want to demonstrate that their technology solutions meet industry standards and there is simply no better way to do that than being certified by MISMO," MISMO President Seth Appleton said. "We applaud DocuTech, OneNotary, Pro Notary and SimplySecureSign for adopting industry best practices and achieving this important designation. This certification is a key component of MISMO’s effort to support, advance and increase the mortgage industry’s adoption of digital solutions, including RON and eClosing transactions."

As more mortgage lenders and title companies integrate with tech companies to create complete electronic closings for the real estate industry, refinancing is becoming easier. Visit Credible to find a lender to help refinance your mortgage and lower your monthly payments.

GETTING A MORTGAGE IS GETTING EASIER THAN EVER

Why is now a good time to refinance your mortgage?

There are numerous reasons why now is a good time to refinance your mortgage and help lower your monthly payments. Below, you'll find just a few:

eClosings are on the rise: As many home closings go digital, it's become easier than ever to refinance your mortgage. In many cases currently, the entire refinance process from application to closing can be completed without ever leaving your home. By 2020, about 80% of title agents were interested in or had already conducted an eClosing, and most have completed a hybrid eClosing; those numbers have only continued to climb, according to a survey from ALTA. 

Mortgage rates are near all-time lows: Mortgage interest rates recently plummeted another 10 basis points to hit 2.78% for the 30-year fixed-rate mortgage, according to the Primary Mortgage Market Survey from Freddie Mac. With interest rates this low, many homeowners could easily lower their monthly payments by hundreds of dollars through a refinance. Visit Credible to compare rates from multiple lenders at once.

BIDEN ADMINISTRATION JUST MADE IT CHEAPER TO REFINANCE YOUR MORTGAGE

Removal of adverse market refinance fee: The Federal Housing Finance Agency (FHFA) announced it would remove the COVID-19-era refinance fee from mortgages backed by Fannie Mae and Freddie Mac. This means an added $1,400 of savings for homeowners that now no longer have to pay the fee either through their closing costs or through monthly payments. While the fee is set to be removed on August 1, many lenders are already removing the fee from their loan costs.

In addition to these benefits, rising home prices also benefit homeowners by allowing them to pull out cash from the equity in their home alongside a refinance. With a digital home closing, refinances are getting easier to obtain. Visit Credible to compare your options and speak to a home loan expert to get your questions answered.

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