Ellie Mae: Low Rates Sustain Refi Surge

Ellie Mae, Pleasanton, Calif, said interest rates below 3 percent pushed the share of refinances of closed loans to a record 60 percent in October.

The company’s monthly Originations Insight Report said refinances closed well above the 2019 high of 51 percent. Purchase loans dropped to 40 percent of all closed loans in October, down two percentage points from September. Conventional loans ticked back up in October, representing 82 percent of all closed loans, up from 80 percent in September.

Ellie Mae said the overall interest rates for loans dropped to 2.99 percent in October, down from 3 percent on all loans in September. The 30-year note rate for VA loans dropped to 2.75 percent, down from 2.78 in September; the 30-year rate on FHA loans held steady at 3.01 percent for the second month while conventional rates dropped to 3.01 percent, down from 3.02 percent the month prior.

“We are continuing to see interest rates decline,” said Joe Tyrrell, president of ICE Mortgage Technology. “We will watch to see how the data shifts as we continue into the fall and the global pandemic and election impact the economic outlook.”

Other report findings:

–Time to close all loans increased to 54 days in October, up from 51 days in September. Time to close for purchase loans increased to 48 days in October, up from 47 days in September. Time to close for refinances increased to 57 days in October, up from 54 days in September.

–The FICO score average for all loans held for the second straight month at 753.

–Closing rates decreased slightly to 76.7 in October, down from 77.1 in September.