Yes, The AVERAGE Loan is Taking Almost 2 Months to Close

According to Ellie Mae’s
Origination Insight Report, loans closed during November had an average note
rate of 2.97 percent. The
30-year note rate for FHA and Conventional loans dropped below the three percent
mark for the first time, averaging 2.99 percent. The note rate on VA loans
continued to decrease, hitting 2.72 percent.

Refinances constituted 61 percent of
total closed loans in the month, 1 point more than in October and 12 points higher
than the November 2019 level. The distribution of loans across lenders held relatively
steady with conventional loans accounting for 82 percent of total originations
and FHA at 10 percent, both unchanged from the previous month. The share of VA
loans increased from 5 to 6 percent.

The time to close all loans
increased to 55 days from 54 days in October. The time to close purchase loans
increased from 48 days to 49 days in November and the timeline for refinances grew
by 2 days to 59 days. The average FICO score for all loans decreased slightly
to 752.

Closing rates declined to 75.6 in
November, down from 76.7 in October. Ellie Mae calculates closing rates
from a review of a sample of applications originated 90 days earlier, in this
case, the August 2020 applications.  

“As we near the conclusion of 2020,
we are still seeing a robust appetite for refinances, accounting for the lion’s
share of closed loans in the month. Interest rates continue to fall below three
percent, driving demand for both purchases and refinances as homebuyers stretch
their spending potential or take advantage of the opportunity to reduce their
monthly mortgage payment,” said Joe Tyrrell, president, ICE Mortgage
Technology. “With many parts of the country entering the next phase of pandemic-related
shutdowns, lenders will need to take advantage of technology to enable virtual
capabilities for their employees and homebuyers and provide automated workflows
to simplify processes and improve engagement with interested parties.”

The Origination Insight Report mines
data from a sample of approximately 80 percent of all mortgage applications
that were initiated on its mortgage management system. Ellie Mae says its
report is a strong proxy of the underwriting standards employed by lenders
across the country.