The average time it takes to close on a VA-backed loan dropped by about three days from January to February, according to a recent report, a bit more than the two-day drop in overall loan closing times.
The report, from mortgage data company Ellie Mae, puts the average closing time for a VA loan finalized in February at 47 days, down from 50 in January. Purchase loans dropped from 50 days to 48, while refinance loans ― which include cash-out and interest rate reduction refinancing loans ― fell from 49 days to 46.
The numbers show little year-over-year change: The average closing time was 48 days last February.
They also continue to dispel the long-serving myth that VA loans take dramatically longer than conventional loans to close. Conventional purchase loans closing in February took 44 days, four days longer than VA products. The widest gap came in the refinancing sector, where conventional loans averaged 37 days to closing, nine days faster than VA products.
The industry-wide drop may stem from a budding purchase market, Ellie Mae CEO and president Jonathan Corr said in a news release announcing the report. The refinance market could take a hit in the coming months as industry experts predict a rise in interest rates.
The average 30-year note rate for VA loans that closed in February was 4.24 percent, per the survey, up from 4.10 percent in January and higher than any point in 2017. Conventional loans averaged 4.52 percent.
Thinking about entering the loan market? Visit our VA Loan Center.
Kevin Lilley is the features editor of Military Times.