This year started off with the average time to close a loan increasing to 50 total days, according to the latest Origination Insight Report released by Ellie Mae®. While the average time to close a refinance increased one day from 47 to 48 days, the average time to close a purchase loan climbed one day to 51. The average time to close FHA loans increased from 49 days to 51 days and conventional loans remained largely unchanged at 49 days. Time to close VA loans increased from 52 to 53 days
Conventional purchase closing rates reached a new high, climbing above 73 percent for the first time since Ellie Mae began tracking data in August 2011. Closing rates for all loans increased one percentage point to 68 percent. Refinance closing rates increased to nearly 65 percent, while purchase closing rates increased to just over 72 percent.
In terms of loan purpose, purchases represented 52 percent of all closed loans while refinances as a percentage of lenders’ overall loan volume jumped to 47 percent.
Ellie Mae’s data also show that the average FICO score on closed loans decreased from 722 in December to 719 in January, the largest month-to-month decline since mid-2015. The average FHA refinance FICO score decreased to 645, down from 651 in December.
“We continue to see the time to close lengthen month over month, now reaching 50 days, which is up four days since TRID went into effect,” says Jonathan Corr, president and CEO of Ellie Mae. “We’re also seeing an increase in purchase and refinance closing rates as they increase to 72.2 percent and 64.9 percent respectively, in January.”
The Origination Insight Report mines its application data from a robust sampling of approximately 66 percent of all mortgage applications that were initiated on the Encompass® all-in-one mortgage management solution. Ellie Mae believes the Origination Insight Report is a strong proxy of the underwriting standards employed by lenders across the country.