The average loan-closing timeline spiked with the introduction of TRID disclosure rules for loans applied for after Oct. 3, 2015. According to Ellie Mae data, it took three or four more days in November to take an average loan from application to closing than it did in October – and that time stayed constant for the next few months.
However, according to Ellie Mae’s latest Origination Insight Report, February saw a steep drop in average closing times. According to the report, the average time to close all loans dropped from 50 days in January to 46 in February – the shortest closing time since May. The average time to close purchase loans dropped from 51 days to 48 days, and the average time to close a refinance dropped from 48 days to 44 days – the smallest timeframe in a year. FHA
loans also saw closing times shrinking.
Closing rates across all loan types were also the highest since Ellie Mae began tracking them in 2011. The average closing rate for all loans rose 1.5 percentage points to 69.9%, while closing rates for conventional purchase loans hit 74.3%.
“For the first time since October 2015, we're seeing a substantial decrease in days to close from 50 days in January to 46 days in February,” said Jonathan Corr, president and CEO of Ellie Mae. “This could be due to lenders becoming more familiar with the new loan estimate and closing disclosure forms and business process around Know Before You Owe. We're also seeing closing rates continue their upswing, increasing one percentage point to 69 percent. This is the highest we've seen closing rates since we began tracking data in August of 2011.”
The average time it takes to close a loan has dropped back to pre-TRID levels, according to new data from Ellie Mae.