May 2016 purchase mortgages increased to 62% of all closed loans, reaching over 60% for the first time since August 2015, according to the latest Origination Insight Report from Ellie Mae, a provider of innovative on-demand software solutions and services for the residential mortgage industry.
Purchases are up from April’s 59%, whereas refinances went down from April’s 40% to 37% in May, according to the report.
Overall, time to close increased from 44 days in April to 45 days in May. Time to close a purchase remained steady at 45 days, refinance remained at 44 days and FHA-backed loans stayed at 45 days.
VA loans, on the other hand, increased from 48 days in April to 49 days in May.
Closing rates for all loans increased to 70% in May, compared to April’s 69%. Refinance closing rates increased to 67% up from 65% and purchase closing rates increased to 75% from 73%.
About 69% of purchases and refinances had FICO scores of at least 700. Whereas 31% of purchases had a FICO score between 600 and 699, only 27% of refinances had scores between 600 and 699.
Conventional loans had the most borrowers with scores over 700 at 82%, compared to FHA loans with only 39% of borrowers with scores above 700.
The report gets its data from a sample of about 75% of all mortgage applications that were initiated on the Encompass all-in-one mortgage management solutions. It is also a supplement to the company's monthly Millennial Tracker, which focuses on Millennial mortgage applications during specific time periods.