Electronic Mortgage Closings Can Take the Pressure Off
People who closed their mortgage using an electronic platform tend to gain a greater understanding of the process, get through it more efficiency and feel a stronger sense of empowerment than those who use a traditional in-office closing, according to a new study from The Consumer Financial Protection Bureau (CFPB).
A 2014 CFPB found that borrowers often felt that they did not have enough time to review documents during the last phase of the mortgage process – the closing.
It’s no wonder, since the closing documents for a mortgage can seem like a huge pile of impenetrable legalese. Sitting in someone’s office while trying to figure all of it out can be a daunting process.
Being able to go through the documents in the comfort of home (via an electronic, or e-closing) can relieve this stress, and give borrowers the time and space they need to get a handle on things.
CFPB found that consumers who use e-closing process vs a traditional one experienced:
- Better consumer understanding: The CFPB measured whether consumers felt like they understood the process. The CFPB asked consumers questions about important loan information, such as the terms and fees. And it asked consumers if they understood the justifications for any differences between quotes and final costs. The study found a 7 percent positive difference in perceived understanding scores for borrowers using eClosings compared to borrowers using paper documents.
- A more efficient process: The survey asked consumers about their perceptions of how efficient the overall process was. This included their perceptions about delays, errors in the documents, and the time between important steps. The study found a 17 percent positive difference in scores for borrowers using eClosings compared to borrowers using paper documents
- Greater feelings of consumer empowerment: The CFPB asked consumers how empowered they felt after the process. The survey asked consumers to respond to statements such as, “I felt I had control over the closing process” or “I felt empowered to play an active role in my closing process.” Other questions asked about having sufficient time to review documents, ask questions, and flag concerns. The study found a 15 percent positive difference in the scores for the eClosing borrowers compared to borrowers using paper documents.
All of this makes perfect sense, so it would be wise for would-be mortgage borrowers to ask if e-closing is an option.
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