Loans take another 2 months to close while demand for refi remains strong
Interest rates on 30 year fixed rate mortgages originate in December reached a record level in the records of ICE Mortgage Technology (formerly Ellie Mae), an average of 2.93 percent and a decline of 4 basis points from the November rate. The company, in its monthly Insight Origination Report, said the note rates for the three loan types it tracks, FHA, conventional and VA, were all below 3.0% for the second month in a row. FHA and conventional loans fell to 2.94 and 2.96%, respectively. Each was on average 2.99% the previous month. The VA rate fell from 2.72 to 2.66%.
Refinancing continued to dominate at 60% of origins, down 1 percentage point from November, but up from 46% a year earlier. The disproportionate share was skewed towards conventional loans at 68 percent. Purchase loans accounted for 81 percent of FHA initiations and 70 percent of VA loans.
“Interest rates continued to fall through the end of 2020, driving the growing share of refinancing for another month,” said Joe Tyrrell, president of ICE Mortgage Technology. “Despite the continued impact of the coronavirus, our lenders leverage technology and digital solutions to manage borrowers’ demand for refinancing, while considering the health and safety of all persons as part of the loans origination process visit https://bridgepayday.com/ for more information.
Conventional loans represented 81% of loans issued during the month, down 1 point from November. Ten percent of the loans were FHA and 6 percent were VA, unchanged from their shares in the previous month. The other types of loans went from 2% to 3%.
The closing time for all loans has increased to 58 days from 55 days in November with loans to purchase, to 56 days against 49 days, ie the entire increase. The refinancing schedule remained at 59 days.
The closing rate for all loans was 76.5%, about a point higher than in November. ICE calculates the closing rate based on a review of a sample of loan requests initiated 90 days prior, in this case the September 2020 requests.
the Insight Origination Report The data for this company comes from a sample of around 80% of all mortgage applications that have been initiated on the proprietary ICE lending platform. The company says its report is a good approximation of the underwriting standards used by lenders across the country.