Closing rates for all loans increased to 72.2 percent in October, the highest point in 2018 according to the October Origination Insight Report from Ellie Mae. This is up from 71.7 percent the month prior. Closing rates on refinances increased slightly to 64.9 percent in October, up from 64.4 percent the month prior, and closing rates on purchases held steady at 76.4 percent for the second consecutive month.
In October, the average 30-year interest rate for all loans increased to 5.01 percent, also the highest in 2018 and up from 4.91 percent in September. The percentage of Adjustable Rate Mortgages (ARMs) increased to 8.2 percent in October, up from 7.2 percent in September.
“As interest rates continue to rise, the percentage of Adjustable Rate Mortgages is increasing as homebuyers are looking to take advantage of the best rates from their lenders,” said Jonathan Corr, president and CEO of Ellie Mae. “Additionally, FICO scores remain the highest we’ve seen in 2018, indicating that lenders are not yet loosening credit availability to attract the shrinking refinance market. We’ll continue to watch this trend into the winter months.”
Other statistics of note in October included:
>>The time to close all loans increased to 45 days in October, up from 44 days in September. Time to close a purchase loan increased to 46 days, up from 45 days in September, while time to close a refinance increased to 43 days in October, up from 42 the month prior.
>>The percentage of purchase loans dropped to 68 percent of total loans from 71 percent the month prior. Refinances represented 32 percent of total loans in October.
>>Overall FICO scores remained steady at 727 in October for the second month. LTV held at 79 for the third month while DTI increased to 26/39.
The Origination Insight Report mines data from a sampling of approximately 80 percent of all mortgage applications that were initiated on the Encompass all-in-one mortgage management solution.
About The Author
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at firstname.lastname@example.org.