Refis saw shorter times to close as more lenders leveraged technology
Refinances saw their share of total mortgage activity increase in September after staying steady in August, according to Ellie Mae’s Origination Insight Report for the month.
“The increase in refinances was most likely due to interest rates on closed loans dipping to 4.21%, the low for 2017,” Ellie Mae President and CEO Jonathan Corr said. “Additionally, time to close a refinance dropped to 40 days as more lenders leverage technology to close loans faster.”
Refinances accounted for 38% of closed loans in September, up from 35% a month ago. Purchase loans were 62% of total activity, down from 65% in August.
Conventional loans made up 66% of closed loans in September, more than its 64% share a month ago. The share of FHA loans slipped to 20% from 22%, while VA loans had a 10% share, remaining unchanged from August.
Closing times across all closed loans increased to 43 days in September from 42 days in August. The closing time for purchase loans increased to 44 days from 43 days, while refinances posted 40 days to close during the month, down from 41 days in July.
September posted an average FICO score on all closed loans at 724, remaining unchanged from August. FICO scores for FHA refinances was also steady at 649, while FHA purchase FICO scores dropped one point to 682. Average FICO scores for conventional refinances increased one point to 731, while conventional purchases had their average score remain unchanged at 752. VA refinance FICO scores dropped a point to 701 and VA purchase FICO scores also dropped a point to 709.
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Refi activity share steady despite rate increase
“The increase in refinances was most likely due to interest rates on closed loans dipping to 4.21%, the low for 2017,” Ellie Mae President and CEO Jonathan Corr said. “Additionally, time to close a refinance dropped to 40 days as more lenders leverage technology to close loans faster.”
Refinances accounted for 38% of closed loans in September, up from 35% a month ago. Purchase loans were 62% of total activity, down from 65% in August.
Conventional loans made up 66% of closed loans in September, more than its 64% share a month ago. The share of FHA loans slipped to 20% from 22%, while VA loans had a 10% share, remaining unchanged from August.
Closing times across all closed loans increased to 43 days in September from 42 days in August. The closing time for purchase loans increased to 44 days from 43 days, while refinances posted 40 days to close during the month, down from 41 days in July.
September posted an average FICO score on all closed loans at 724, remaining unchanged from August. FICO scores for FHA refinances was also steady at 649, while FHA purchase FICO scores dropped one point to 682. Average FICO scores for conventional refinances increased one point to 731, while conventional purchases had their average score remain unchanged at 752. VA refinance FICO scores dropped a point to 701 and VA purchase FICO scores also dropped a point to 709.
Related stories:
Mortgage application volume continues decline
Refi activity share steady despite rate increase
