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® ELLI, the leading cloud-based platform provider for the mortgage finance industry. 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 robust sampling of approximately 80 percent of all mortgage applications that were initiated on the Encompass® all-in-one mortgage management solution. Ellie Mae believes the Origination Insight Report is a strong proxy of the underwriting standards employed by lenders across the country.
In addition to the Origination Insight Report, Ellie Mae also distributes data from its monthly Ellie Mae Millennial Tracker on the first Wednesday of each month. The Ellie Mae Millennial Tracker focuses on mortgage applications submitted by borrowers born between the years 1980 and 1999.
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MONTHLY ORIGINATION OVERVIEW FOR OCTOBER 2018 |
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| Oct. 2018* | Sept. 2018* |
6 Months |
1 Year Ago |
|||||||||||||
| Closed Loans | ||||||||||||||||
| Purpose | ||||||||||||||||
| Refinance | 32% | 29% | 34% | 39% | ||||||||||||
| Purchase | 68% | 71% | 66% | 61% | ||||||||||||
| Type | ||||||||||||||||
| FHA | 19% | 20% | 20% | 20% | ||||||||||||
| Conventional | 65% | 65% | 66% | 66% | ||||||||||||
| VA | 10% | 10% | 10% | 10% | ||||||||||||
| Days to Close | ||||||||||||||||
| All | 45 | 44 | 41 | 43 | ||||||||||||
| Refinance | 43 | 42 | 37 | 40 | ||||||||||||
| Purchase | 46 | 45 | 42 | 44 | ||||||||||||
| Percentage of ARM and Fixed Loan Volume | ||||||||||||||||
| ARM % | 8.2% | 7.2% | 6.6% | 5.5% | ||||||||||||
| 30-Year Rate | ||||||||||||||||
| Average | 5.010% | 4.910% | 4.790% | 4.200% | ||||||||||||
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*All references to months should be read as month ended. |
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PROFILES OF CLOSED LOANS FOR OCTOBER 2018 |
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|
Closed First-Lien Loans |
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| FICO Score (FICO) | 727 | |||
| Loan-to-Value (LTV) | 79 | |||
| Debt-to-Income (DTI) | 26/39 | |||
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More information and analysis of closed and denied loans by loan purpose and investor are available in the full report at http://www.elliemae.com/about-us/news-reports/ellie-mae-reports/. |
To get a meaningful view of lender pull-through, Ellie Mae reviewed a sampling of loan applications initiated 90 days prior—or the July 2018 applications—to calculate an overall closing rate of 72.2 percent in October 2018 (see full report).
About the Ellie Mae Origination Insight Report
The Origination Insight Report focuses on loans that closed in a specific month and compares their characteristics to similar loans. The closing rate is calculated on a 90-day cycle rather than on a monthly basis because most loan applications typically take one-and-a-half to two months from application to closing. Loans that do not close could still be active applications or applications withdrawn by consumers or denied for incompleteness or non-qualification.
The Origination Insight Report details aggregated, anonymized data pulled from Ellie Mae's Encompass origination platform.
News organizations have the right to reuse this data, provided that Ellie Mae, Inc. is credited as the source.
About Ellie Mae
Ellie Mae ELLI is the leading cloud-based platform provider for the mortgage finance industry. Ellie Mae's technology solutions enable lenders to originate more loans, lower origination costs, and reduce the time to close, all while ensuring the highest levels of compliance, quality, and efficiency. Visit EllieMae.com or call (877) 355-4362 to learn more.
© 2018 Ellie Mae, Inc. Ellie Mae®, Encompass®, AllRegs®, Mavent®, Velocify®, the Ellie Mae logo and other trademarks or service marks of Ellie Mae, Inc. appearing herein are the property of Ellie Mae, Inc. or its subsidiaries. All rights reserved. Other company and product names may be trademarks or copyrights of their respective owners.
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