Quick answer: A hybrid closing mixes electronic signatures with some in-person signing. A virtual closing uses Remote Online Notarization (RON), so eligible documents are signed and notarized online by video. Availability depends on the loan, the property location and your title or settlement provider.
For years, the final step of getting a mortgage looked pretty much the same.
Drive to a title company or attorney’s office. Sit down at a conference table. Work your way through a large stack of documents. Sign here. Initial there. Repeat.
Technology is finally changing that experience.
Today, hybrid and virtual closing options can make completing a mortgage more convenient, more efficient and—in some cases—possible without the traditional trip to the closing table.
What Is a Hybrid Mortgage Closing?
A hybrid closing combines electronic signatures with traditional signatures.
Instead of signing every document by hand at closing, many documents can be reviewed and signed electronically. Only the documents requiring traditional signatures or notarization may need to be completed in person.
The result?
Less paper and potentially less time spent at the closing table.
It also gives borrowers an opportunity to interact with portions of their closing package electronically rather than confronting an entire stack of paperwork at once.
What Is a Virtual Mortgage Closing?
A virtual closing can take convenience another step further.
When the loan, property location and other requirements permit it, technology such as Remote Online Notarization (RON) can allow borrowers to meet with a notary through a secure online audio/video connection and electronically sign and notarize eligible documents.
That can mean completing a closing from home, the office—or somewhere else convenient—rather than coordinating everyone’s schedule around an in-person appointment.
Virtual closings aren’t available for every mortgage, but their growing availability gives borrowers another closing option that simply didn’t exist in the traditional mortgage process.
Are Electronic Mortgage Closings Better? What the CFPB Found
There’s evidence that they can.
In a 2015 pilot study, the Consumer Financial Protection Bureau (CFPB) reviewed 3,292 loans from seven lenders and surveyed borrowers who closed on paper and electronically.
Compared with paper closings, consumers using electronic closings reported:
- 17% better perceived efficiency
- 15% greater feelings of control and empowerment
- 7% better perceived understanding of the closing process
The study also found that consumers who received and reviewed documents before the closing meeting generally reported a better experience, and that early review was far more common with electronic closings (81% versus 24% for paper).
That’s an important benefit of moving more of the process online.
Convenience shouldn’t come at the expense of understanding what you’re signing. Ideally, technology gives you more opportunity to do both.
Does Tithe Lending Offer Hybrid and Virtual Closings?
Tithe Lending has access to hybrid and virtual closing options when they’re available for the particular mortgage transaction.
Not every loan can be closed virtually. Availability can depend on the loan, location, title or settlement provider and other closing requirements.
But when a digital closing option is available, we’ll help you understand your choices so you can select the closing experience that works best for you.
A Better Way to Finish Your Mortgage
Getting a mortgage is a major financial decision.
Closing one doesn’t need to feel like a major production.
From traditional closings to hybrid and virtual options, technology is giving borrowers more flexibility in how they complete the final step.
At Tithe Lending, we’re using those options to help make getting a mortgage simpler and more convenient from application through closing.
Frequently Asked Questions
What is remote online notarization (RON)?
RON lets a notary verify your identity and witness your signature over a secure audio and video connection, so eligible documents can be signed and notarized online.
Can every mortgage be closed virtually?
No. It depends on the loan type, the property location, the title or settlement company and local rules. Ask your loan officer early so your closing can be planned around the right option.
What do I need for a virtual closing?
Typically a government-issued photo ID, a computer or phone with a camera, microphone and a stable internet connection, and time to review your documents before the meeting.
Next step: Ask about a hybrid or virtual closing when you apply, and we will tell you which options are available for your loan.
Availability depends on the loan, property location and title provider. It only takes a few minutes.
Sources
- CFPB, “Leveraging technology to empower mortgage consumers at closing” (August 2015)
Tithe Lending LLC | NMLS #2439006 | Equal Housing Lender. General information only; not a loan offer or financial, tax or legal advice.