Closing Time
Since the institution of new disclosure and closing rules last October, closing times have been steadily climbing—until now. Delays in the length of closing are finally subsiding.
This spring, average closing times fell by six days, according to mortgage application software giant Ellie Maes Origination Insight Report. The average time to close is now 45 days, down from a 51-day peak in January.
The TILA-RESPA Integrated Disclosure (TRID), otherwise known as Know Before You Owe, combined existing disclosures with new requirements from the Dodd-Frank Act, creating new forms and procedures at the closing table. This triggered a slowdown in closing times across the country, causing the closing window to increase from 46 days to 51 days in just a few months. The closing time of 45 days marks a drop from February’s 48 days and is in line with pre-TRID times.
“This (reduction) 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,” says Jonathan Corr, president and CEO of Ellie Mae.
It’s possible that the time to close may continue to fall. In early 2015, it only took 40 to 44 days to close a loan.
More good news for homebuyers: Closing rates are climbing, hitting 75.1 percent in February, the highest rates seen since the housing crash. Federal Housing Administration (FHA) loans are now closing at 71.1 percent. Those numbers steadily increased all last year.
