What To Expect When Closing On A House Remotely

Closing on a home remotely is no longer just for out-of-state buyers or investors. Handling complex transactions from different locations has become popular with home buyers of all backgrounds who want to introduce more convenience to the home buying process.

Remote notarization of important paperwork, such as closing documents, is legal in some form in most states. And it’s getting easier to close on a house without being present.

Are you thinking of closing on a mortgage remotely? Let’s take a detailed look at what you should expect from remote closings.

A remote closing, often called a virtual closing, is a real estate transaction where identities are verified virtually and all documents are signed electronically. In states that allow for remote closings, new home loan and mortgage refinance transactions can be finalized without meeting in person.

With a remote closing, all parties can complete all or some of the same tasks from the comfort and convenience of their home or office using a computer. Virtual closings often involve eMortgages, which are electronically created, stored and transferred versions of traditional mortgage documents.

You may be able to close remotely on your loan whether you’re looking to buy a new home or refinance your mortgage.

Even if your state doesn’t permit a 100% remote closing, Rocket Mortgage^® can conduct at least a portion online. We now perform remote closings in one form or another in all 50 states.

With a virtual real estate closing, home buyers or homeowners opting to refinance may meet and proceed with the closing online instead of in person.

With a fully online closing, you can expect to meet remotely via virtual video conference. If you’re buying a property, you’ll likely meet virtually with the sellers, real estate agents and other necessary parties, such as a real estate attorney. Any payments to process for closing will likely happen through electronic transfer, and mortgage documents are signed electronically.

But not all remote closings are the same. Due to various eClosing laws across the country, it’s not always possible to close entirely online. Depending on your state, the process may look a little different from the process we described.

The three main eClosing “models” are the hybrid method, remote online notarization (RON) and in-person e-notarization (IPEN).

The Hybrid Closing Method

Online closings are legal in most states but can get a little more complicated in other states. If your state's digital closing policy doesn't permit online notarization, it’s possible to close on a mortgage using the hybrid method.

With the hybrid method, you electronically sign everything that doesn’t require a notary before your closing date. Once the date arrives, you can meet in person with a real estate notary or closing agent and sign the rest of your documents to secure your financing.

While this method isn’t fully remote, it’s perfectly legal across the country because you still sign the important documents in person. And the closing process is faster since you make payments and sign some documents before your scheduled closing date. Most closings still happen via the hybrid method.

Remote Online Notarization (RON)

Remote online notarization, or RON, allows you to complete the entire real estate closing process from the comfort of your home. Rather than confirming your identity in person, you’ll jump on a video conference call at closing and present your identification, such as your driver’s license or passport.

In-Person E-Notarization (IPEN)

In-person e-notarization, or IPEN, is when closing documents are signed electronically, but not remotely. An electronic notary can notarize without any paper involved, but they will need all parties involved in the closing to be physically present.

Although this type of online closing must happen in person rather than remotely, it cuts down on paper waste by using electronic documents, helping to secure your closing process by confirming your identity in person. While IPEN isn’t technically a remote closing, it has its benefits.

Let’s look at some common questions typically associated with remote closings.

What is a ‘wet signature’ and when is it required?

A “wet signature” refers to a real, physical signature on a document rather than an electronic signature. Thanks to RON, technically, all documents can be signed virtually as long as the state allows it.

Some states without permanent RON bills may require some of your mortgage documents, like promissory notes or other closing paperwork that require a notary signature, to be signed physically and in person. Some states or mortgage lenders may require a “wet signature” for legal reasons, such as to help prevent fraud.

What has prevented remote closings from becoming more common?

Electronic closings have existed since before COVID-19, but weren’t widely available. Previously, if you couldn’t attend a closing in person, you had to give a chosen representative power of attorney to sign on your behalf.

Many states have changed their laws to make remote closings possible, but no federal standard is currently in effect. As more and more states change their policies and Congress continues to look into a federal standard, remote closings will likely continue to grow in popularity.

Will remote closings become the new standard?

Remote closings are a convenient new way to tackle the process of getting the keys to your new home or refinancing your mortgage, and they certainly seem like the logical next step in the world of real estate. If you can buy a car remotely and have it shipped to your doorstep, why not make buying a home from your computer the new standard?

It stands to reason that this may be the preferred closing method in the future, but remote closings have a way to go since they’re not legal everywhere.

Rocket Mortgage is dedicated to making the mortgage process easier going forward. We can perform online closings in some form in all 50 states. Even if your state prohibits RON, you can complete at least a portion of your closing digitally with the hybrid method or IPEN.

Which states allow remote online notarization?

Currently, 88% of states allow RON. It’s a large enough percentage that it’s easier to list states that don’t allow it: Connecticut, South Dakota, Mississippi, Alabama, Georgia and South Carolina. All other U.S. states allow remote notarizations.

A remote closing is a faster and more convenient method of closing on a mortgage, but the rules aren’t the same for all closings across the U.S. Make sure to research the remote notarization laws in your state before deciding whether this closing method makes sense for you.

If you’re ready to move forward and buy a home or refinance your mortgage, you can apply online.