Shift to purchase loans cuts closing times
The time needed to close a mortgage improved nine days since the start of the year as the market has shifted to doing more purchase loans.
It took an average of 42 days for a loan to go from application to closing in April, according to the Ellie Mae Origination Insight Report. For March, the average was 43 days.
Time to close started inching upward last April, when it was 44 days, which was the fastest month for the year. It rose to 48 days in October before the election and peaking at 51 days in January.
But where it took nine months for the average to rise seven days, it only took three months to shave nine days from the cycle.
There were a couple of factors that caused the longer cycle times in the first place, said Ellie Mae CEO Jonathan Corr.
"First, after the election, we saw a lot of people trying to get refinances done ahead of the rate increase. This, coupled with seasonality and holiday staffing, had an impact on time to close," he said.
In April it took 41 days to close a refi, compared with 53 days in January, and 42 days to close a purchase, compared with 48 days during the same period.
"Now we're seeing a shift to a much stronger purchase market. This trend along with our customers driving efficiencies through their use of technology to automate more of the mortgage process will continue to drive down the time to close," Corr said.