Closing Times Are Speeding Up
The average time to close on all mortgage loans dropped to 44 days in March, the shortest amount of time in a year, according to Ellie Mae’s latest Origination Insight Report.
New mortgage rules went into effect last October, pushing closing timelines from 46 days in October to 48 days in November and December, and then to 50 days in January. But lenders and real estate professionals have had time to adjust to the new rules, and closing times are speeding up again.
The average time to close on a loan for a home purchase fell to 45 days in March, while closing times for refinancing dropped to 41 days. Times to close on FHA loans also fell to 44 days in March, while VA loans averaged 48 days to close.
What’s more, Ellie Mae’s report shows that the average closing rates for all loans continued to rise to the highest level since tracking began in 2011. Closing rates for all loans rose to 70.6 percent in March (closing rates on purchase loans was slightly over 75 percent). Ellie Mae calculates the closing rate on a 90-day cycle, since most loan applications require one-and-a-half to two months from application to close.
Sixty-seven percent of all closed loans had FICO scores above 700. The average credit score was 722. Only 12 percent of the closed loans had scores below 650, according to Ellie Mae’s report. The average loan-to-value ratio was 80 percent, and the average debt-to-income ratio remained constant at 25/38.
Source: “What TRID Delay? Turn Times Lowest in a Year,” Mortgage News Daily (April 21, 2016)