The time to close all loans fell in February to 42 days from 44 days as interest rates kept rising, according to Ellie Mae’s Origination Insight Report for the month.
On average, it took 37 days to close a refinance loan in February, down from 40 days in January. Ellie Mae said the drop is significant, given that 2017 data shows refinances took 47 days to close. Meanwhile, the time to close all purchase loans decreased from 47 days in January to 45 days in February.
“As expected, we are seeing the percentage of refinances taper back off to the projected industry levels,” Ellie Mae President and CEO Jonathan Corr said. “And with interest rates on the rise, we’re seeing the purchase market begin to gain some momentum. We know that the shift to a purchase market will drive the shortened time to close and we will watch to see if the trend continues into the spring and summer months.”
FHA loans took 43 days to close in February, a decrease from the 47 days it took in January. The time to close a conventional loan shrank from 43 days in January to 41 days in February. It took 47 days to close a VA loan in February, down from 50 days in January.
Although loans closed faster during the month, Ellie Mae noted that closing rates decreased slightly. The closing rates for all loans fell to 70.6% from 70.9%. Closing rates on refinances slipped to 65% from 65.5%, while closing rates on purchases held at 75.7% for the second straight month.