Origination closing rates reached their highest levels
of the year in July according to Ellie Mae’s Origination Insight Report. The closing or pull-through rate for all
loans increased to 71.6 percent compared to 69.6 percent in June with the rate
for purchase loan closings rising to 75.7 percent from 73.7 percent the
previous month. Refinances closed at a
66.6 percent rate, up nearly 2 percentage points. The report provides data only as far back as
March 2015 but for all but two loan types (FHA purchases and Conventional
refinances both had a slightly higher rate in May) it was the highest
pull-through rate achieved over that period.
The share of refinances increased to 37 percent of all
originations in July, 3 percentage points higher than in June, while purchases
declined to 62 percent from a survey high of 65 percent. The share across loan
types remained virtually unchanged from June with Conventional loans rounding
up to 65 percent from 64 percent while FHA and VA remained at a 23 percent and
9 percent share respectively.
It took an average of 46 days to
close a loan in July, the same as in June.
The purchase loan timeline was unchanged at 46 days while it took one
day longer, 48 days, to process a refinance loan.
The average FICO score for a
conventional refinance loan was 739, the highest average since March 2015. The FICO score for all loans was an average
of 727 while the average for an FHA refi was 654 and a purchase loan was 686.
Debt-to-income rations remained
steady for all loans at 24/38. The
average loan-to-value ratio fell 1 percentage point to 80 percent.
“Refinances are making a slight rebound in
July, representing 37 percent of closed loans in July, up from 34 percent in
June,” said Jonathan Corr, president and CEO of Ellie Mae. “Average FICO scores
were also on the rise, climbing back to 727, which is the highest average we’ve
seen since June of 2015.”
The Origination Insight Report compiles
its application data from a sampling of approximately 75 percent of all
mortgage applications that were initiated on its Encompass® management system.