Market shift slashes refinance closing times
Closing times for refinances have fallen dramatically due to mortgage lenders' increased emphasis on home purchase loans.
"As expected, we are seeing the percentage of refinances taper back off to the projected industry levels, and with interest rates on the rise, we're seeing the purchase market begin to gain some momentum," Jonathan Corr, president and CEO of Ellie Mae, said in a press release.
"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."
The average time needed to close a refinance loan in February was 37 days, which is 10 days shorter than it was a year ago. It's also three days shorter than the previous month, according to Ellie Mae's Origination Insight report.
Purchase loans, which represent 57% of completed originations, are taking 45 days to close. While this is two days faster than in January, it isn't any faster than it was a year ago.
Conventional loans, which represent 67% of originations, are taking 41 days to close, down from 43 days in January and 46 days in February of last year.
Federal Housing Administration loans are taking 43 days to close, down from 47 days in January and 45 days in February of last year. Loans insured by the Department of Veterans Affairs are taking 47 days to close, down from 50 days in January and 48 days a year ago.
Ellie Mae's data reflects mortgage activity processed through the company's loan origination system.