Whenever you purchase real estate, you’ll almost certainly need to exchange important financial documents with someone. This is especially true if you will need a mortgage to complete the purchase of the property. It may also be true if you’re planning on paying cash, as some people may require proof of funds for the purchase.
If you’re planning on obtaining a mortgage, you’ll need to provide two years of tax returns, two paycheck stubs, two years W2s, bank statements, investment statements and possibly some other important personal and financial documents. When you do that, the person who reviews your sensitive financial documents will probably advise you to drop it off at the office. Upon hearing that suggestion, you might be tempted to ask yourself, “Why do I need to drive there when I can send the information by email? This isn’t the 1970′s, after all!”
While we are certainly living in the Information Age, you should know that not a few unscrupulous individuals use information technology to their advantage. There are hackers, identity thieves, and eavesdroppers of various sorts who would love to get their hands on your personal information. When that happens, you could end up losing both time and money to combat the people who stole from you.
In Person vs Email vs Dropbox vs Inzopa
The In Person Hand Off
When you’re handing sensitive financial documents to somebody personally (information technology wonks refer to this as “sneakernet” because you’re walking the financial docs to somebody else as opposed to sending it), then you will enjoy the highest level of confidence that your information won’t be stolen by hackers because it wasn’t transmitted digitally.
Disadvantages of Personal Document Delivery
#1. It can be extremely time-consuming to work with even one lender.
#2. The usually lengthy process of buying real estate and getting a mortgage will require you to hand-deliver certain financial documents (e.g., paycheck stubs, bank statements and investment statements) repeatedly.
#3. Finally, you won’t have a record of conversations you’ve had and promises you’ve been given if all of your communication is by voice.
Email Most Popular, But Unsecure Alternative
Of course, documents can also be transmitted by email. Email is free. The service is available to almost everyone. It’s user-friendly because everyone who has it already knows how to use it.
Problems with email
#2. You’ll also be faced with constraints about file sizes: your recipient’s inbox might not have enough room for several megabytes of financial document attachments.
#3. Emails can also be viewed by criminals who have obtained your credentials (or your correspondent’s credentials) by some illicit means, such as phishing.
#4. Also, you’ll end up exchanging about 100+ emails during the process of home loan with just “1 lender”. Keeping track of all of those email threads and attachments is painful.
File Sharing a Better, but a Partial Option
Some people use file sharing services like Dropbox to exchange documents. These services are great for non-secure communication. They’re also typically ubiquitous: they allow you to access your documents from anywhere, using just about any device. You’ll also find that these services usually offer free storage up to 1 Gb.
The Drawbacks with File Sharing
#1. When you use a file sharing service, though, you’ll still typically need to fall back to an email to perform the actual communication. Of course, that means that you’ll be tracking the discussion in two separate locations, which complicates things.
#2. Also, you need to be sure that you don’t neglect to turn off sharing or links to financial documents once the transaction is completed. Otherwise, if one of your correspondents has an email account hacked, then that account can be used to access your documents on the file sharing service.
The reality is this: file sharing services like Dropbox are fantastic tools, but not designed for real estate and mortgage transactions.
The New Way
The most fool-proof method of managing real estate and mortgage transactions is to use one secure and completely private site, to exchange financial documents and track the work stream.
Enter Inzopa: Private network of home buyers / owners, loan officers, and real estate agents. It’s not only free for consumers, it is designed specifically for the privacy required by mortgage and real estate transactions. All you do is log in to the cloud based, completely confidential, secured network.
Inzopa lets you invite or search for real estate agents and loan officers who match your specified criteria, enables you to create private circles of well-qualified, pre-screened industry professionals to exchange financial documents with in a secure online environment.
Unlike the other options mentioned, comments are retained in a single thread, making it easy for you to track promises and conversations. Perhaps most importantly, financial data access is automatically terminated on your behalf. Your security is essentially automated.
#1. Inzopa currently is in private beta and is accessible on invitation basis.