Ellie Mae: Refis, Closing Rates Up
Mortgage interest rates are low—you know that; refinancings have been going through the roof—and if you’ve been following the Mortgage Bankers Association’s Weekly Applications Survey or the activity in your office, you know that, too. But Ellie Mae, Pleasanton, Calif., has another stat you might be interested in: closing times, which have also dramatically improved.
The company’s monthly Origination Insight Report said ime to close all loans declined to 43 days in February, down from 48 days in January, likely due to seasonality. Closing rates on all loans increased to 78.3 percent in February, up from 77.2 percent the month prior. Closing rates on purchases held at 80.7 percent and closing rates on refinances increased to 76.0 percent, up from 75.8 percent the month prior.
“Interest rates continued to decline into February which we believe is causing us to see a small refinance rebound,” said Jonathan Corr, President and CEO of Ellie Mae. “We will wait to see what the impacts of global factors, like stock market declines and the coronavirus, have on the housing market as we enter the spring. We continue to see our lenders consistently lowering their time to close and closing more loans as they leverage digital mortgage technology across more aspects of the loan origination workflow.”
Ellie Mae noted the 30-year rate on all loans dropped to 3.86 percent in February, down from 3.96 percent in January, while the 30-year rate on conventional loans fell below 4 percent for the first time since October, dropping to 3.89 percent from 4.03 percent in January. Similarly, the 30-year rate on FHA loans dropped to 3.87 percent, down from 3.91 percent the month prior. The 30-year rate on VA loans followed suit, dropping to 3.62 percent from 3.64 percent in January.
Ellie Mae said as rates dropped, refinances increased, representing 48 percent of all closed loans in the month, up from 46 percent the month prior. Purchase loans still continued to make up the majority of the market, representing 52 percent of closed loans in February.
The report said FICO scores on all closed loans held steady at 738 for the second month.