Lenders reduced mortgage closing times for the fourth consecutive month in April, approaching pre-pandemic levels.
The average number of days to close has fallen to 51 from 52 in March but remains high compared to the average of 42 a year ago, according to ICE Mortgage Technology.
Mortgage closing times improved the most, with the average borrower closing a home purchase in 49 days, down from 51 days month-over-month, and in up from 46 days year over year.
The adoption of automation and digital processes will play an important role in further reductions to come, said ICE President Joe Tyrell.
“The decrease in average time to shutdown is not surprising, given the increase we’ve seen in the adoption of digital transformation tools,” Tyrrell said in the Origination Insight report. “Digital mortgage technologies make it faster and easier to close a mortgage, improving the overall experience for participants.”
Refinancing closing times fell to 53 days in April, compared to 52 in March and 39 the previous year. As the traditional season of buying a house started, the loan division in April increased to 43% purchase, 56% refinance. This is a more balanced ratio than buying 36% and 63% of the refinancing stocks in March and buying 35% and refinancing 65% from April 2020 in the first full month of impact. of the pandemic.
With interest rates should rise until 2022, the purchase share could continue to increase, with borrowers losing interest in refi. The expansion of credit also tilts the balance in favor of purchase mortgages. The average FICO score fell to the lowest level in 13 months, hitting 747 in April from 751 in March and 749 a year earlier. That aligns with a two-month increase in credit availability, according to an analysis by the Mortgage Bankers Association.