Sunday, May 31, 2009

Are Electronic Signatures Allowed on Sales Contracts?

Electronic signatures on real estate sales contracts are becoming common, but there are a few things that you need to know to make the financing go smoothly when electronic signatures are involved.

-- For VA loans, electronic signatures are not allowed. Everything must be signed with a pen.

-- For FHA loans, electronic signatures are allowed by HUD (which makes the rules for FHA loans), but not every lender will allow them.

-- Fannie Mae and Freddie Mac allow electronic signatures, but again, not every lender will allow them.

Typically, an underwriter will allow everyone to re-sign the contract in pen at the closing, but not always. Sometimes (almost always with VA loans), the underwriter will require the contract to be signed in pen before issuing the final loan approval.

The main thing to keep in mind is that it does not matter what the real estate contract rules are. If the buyer is financing the house they are purchasing, the companies that are providing the money (the lenders) get to make the rules.

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