Share of purchase loans increasing, time to close decreasing
Ellie Mae: Refinances represent 43% of total share
Residential home loan refinances continued on a downward trend in February, according to the Origination Insight Report for February 2014 from Ellie Mae (ELLI). Home loans for purchases represented 57% of the total loans processed through Ellie Mae’s mortgage management software. Refinances represented 43% of the total loans.
That represents a decrease from January, where refinances were 47% of the loan originations and purchases were 53%. February’s purchase versus refinance figures also show a steep drop from one year ago, where refinances represented 68% of the originated loans and purchased were 32%.
The days to close on a loan also decreased from January. In January, the days to close a loan was 45 days. In February, that figure dropped to 41 days. According to Ellie Mae’s report, refinance loans took, on average, 40 days to close in February compared to 44 days in January. The time to close a purchase loan also dropped from 47 days to 42 days.
“The share of purchase loans jumped four percentage points, representing 57% of all closed loans in February 2014,” said Jonathan Corr, president and chief operating officer of Ellie Mae. “This is the first time in four months that the share of purchase loans increased month over month and the largest one-month increase since August 2013, when the share of purchase loans also jumped four percentage points.”
The average FICO score for all closed loans is also decreasing. The average FICO score on all closed loans was 724 in February 2014 compared to 745 in February 2013. Additionally, 33% of closed loans in February had an average FICO score of less than 700 compared to 24% one year ago.
Ellie Mae gathered this data from a “robust sampling” of the 3.5 million loan applications run through its software in 2013.
A copy of the report can be viewed here.