LenderLogix: Q3 Sees Dip in Pre-Approvals, but Bigger Down Payments

(Image courtesy of Belle Co/pexels.com)

LenderLogix, Buffalo, N.Y., released its Homebuyer Intelligence Report for Q3, finding that borrowers generated 8.61% fewer pre-approval letters through its QuickQual pre-approval platform than in Q2.

The average number of pre-approved borrowers per loan officer fell from 28.6 in the previous quarter to 25.2.

The average loan amount on pre-approval letters fell from $367,305 to $328,997 in Q3, and the average sales price fell from $423,667 to $385,822.

But, prospective home buyers were bringing more cash, with the average down payment percentage increasing from 13.3% to 14.7%.

“Despite a modest seasonal decline in pre-approval activity and loan amounts, borrowers are signaling seriousness through larger down payments and steady interest across loan types,” said LenderLogix Co-Founder and CEO Patrick O’Brien. “These trends point to a purchase market that is more price-conscious but still active.”

Conventional loans were the most popular type in the Q3 data and were nearly flat from the previous quarter (74.7% in Q2 and 74.6% in Q3).

FHA pre-approvals increased from 18.6% to 18.7%, VA loans fell from 4.5% to 4.2% and USDA loans were flat at 1%.

The average number of days between pre-approval and loan submission increased from 86.3 to 89.5 days.

The conversion rate among borrowers was flat at 56%, and borrowers required an average of eight pre-approval letters before converting.

The number of documents uploaded through its LiteSpeed POS platform grew 1.5% quarter-over-quarter, and successful verification of income and employment through POS across all providers increased from 17.1% in Q2 to 17.8% in Q3. Verification of assets fell from 33.7% in Q2 to 31.2% in Q3.

The report is a quarterly summary of insights into borrower behavior during the home-buying process based on data collected by the LenderLogix suite of tools.