Most Americans trust digital financial transactions, survey finds: Here's how mortgage closings could change
Amid a rise in popularity of online mortgage closings, a new survey found that a majority of American adults (81%) say they feel secure in making their financial transactions online.
The survey, conducted by remote online notarization (RON) company Notarize, also revealed that 59% of respondents say the traditional notarization process "hasn't kept up with the times."
RON allows those who need a notary to perform the notarization online in front of a webcam, rather than in person. The process has become increasingly popular for mortgage transactions, allowing for remote closings and a complete mortgage eClosing experience.
"Even the most traditional, in-person transactions have quickly shifted online and as a result consumers are rethinking every facet of how they conduct sensitive financial transactions digitally," Notarize Founder and CEO Pat Kinsel said in a statement. "The data confirms what we at Notarize know to be true – people trust digital transactions, but still want safety and security throughout the process and are willing to go through the extra steps to give them peace of mind that their transactions are verified and safe."
As digital closings become more popular, it's important to compare lenders so you can choose which one best meets your personal financial needs. If you're interested in taking out a mortgage or are looking to refinance digitally, visit an online marketplace like Credible to compare multiple lenders and options at once.
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Proponents of RON often stress that it's secure, perhaps even more so than in-person closings due to its added security steps to meet compliance regulations. More specifically, the transaction is recorded on video and stored, it scans IDs and runs an instant background security check and asks security questions.
Americans are still wary of the increase in scams, too, which surged during the COVID-19 pandemic. Notarize’s survey shows that 51% of those who have completed online financial transactions feel safer when a two-factor authentication is present, and 48% feel safer when they have to answer security questions.
If the idea of taking out a mortgage refinance without leaving your home sounds appealing to you, visit Credible to compare lenders and get prequalified in minutes without affecting your credit score.
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Currently, 35 states have permanent RON laws in place for mortgage eClosings, and temporary measures were enacted in others to allow real estate transactions to continue during economic shutdowns. These new measures ushered in an unprecedented era of digital mortgage growth, and resulted in many lenders offering more digital processes during the coronavirus pandemic.
But because not every lender or state offers this digitization option, it's important for homeowners and homebuyers to question their lender before starting a mortgage refinance. Here are tips for homeowners to ensure their lender can close loans digitally:
1. Compare multiple lenders: Different lenders will have various home financing options available to homeowners including different interest rates or digital offerings. Lower rates could save a borrower on their monthly payments, and more digital opportunities could create a smoother customer experience. Visit Credible to compare multiple mortgage lenders at once and find out which one is a good fit for you.
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2. Ask questions before choosing a lender: Before deciding on a lender, conduct extensive research on them or speak to one of their loan officers. Ask yourself, what does eClosing mean to them? Does digital mortgage mean they start the mortgage process online, or will it be completely digital through the end?
Some lenders say they have digital closings, but still require borrowers to physically go to the title company to close on the mortgage on an iPad. If remote closing is important to you, ask upfront if the lender offers RON in its digital mortgage process. Remember to get specific with your questions, too.
For example, does the word "digital" for your lender mean you can upload your bank statements digitally to their platform, or is their software advanced enough to connect to your bank account to pull your financial information for you?
3. Be persistent: Just because you may have already chosen a lender doesn’t mean you have to stop asking questions or make any requests. If a lender or the title company you're using has too much of a manual process for your taste, ask what can be done to change it. Would a different title company work better with your lender to give you digital options?
If you’re thinking of refinancing, consider using Credible. You can use Credible's free online tool to easily compare multiple lenders and see prequalified rates in as little as three minutes.
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