The length of the mortgage lending process continued to grow in December, according to the latest Origination Insight Report released by Ellie Mae.
Overall closing times grew by one day from November to 50 days, matching January 2016 as the longest time to close loans since February 2013. It’s the third month in a row that times have climbed by a day, and is nearly a week longer than 2016’s low mark of 44 days reached in March and April.
The average time to close loans in 2016 was 47 days, up one day from 2015and up seven days since 2014. The average time to close was 46 days in 2013 and 48 days in 2012, the first full year of data tracked by the Origination Insight Report.
Refinance loan closing times grew by a day to 52 days, the longest time since July 2015.
Purchase loan closing times grew by a day to 48 days, the highest mark since it reached 51 days in January 2016.
As the 30-year note rate started to rise, home loan purchase percentages began to increase slightly in December, rising to 54 percent of all closed loans, up from 53 percent in November.
“As rates began to increase we saw purchases tick back up in December, signaling the start of a trend we expect to continue into 2017,” Ellie Mae CEO and President Jonathan Corr said in a press release. “We also saw closing rates rise to the highest percentage in 2016 as homebuyers locked in rates and lenders closed loans before the conclusion of the year.”
Closing rates for all loans increased to 73.2 percent in December, the highest rate in 2016. Refinance closing rates increased to 69.6 percent, up from 68.7 percent the month prior, and purchase closing rates increased to 77 percent, up from 76.1 percent in November.
Average FICO scores decreased slightly in December to 726, down from 728 the month prior. Conventional purchase FICO scores stayed steady at 753 for the third month while conventional refinance FICO scores tapered off to 739, down from 743 in November. FHA purchase FICO scores remained at 686 while FHA refinance FICO scores increased one point from 654 in November to 655 in December. VA purchase FICO scores dropped to 707, down from 709 in November, and VA refinance FICO scores dropped one point to 709 in December.