Lenders in January saw their share of refinancing activity jump 8 percentage points to comprise 51 percent of all loan volume, the highest level in more than a year-and-a-half, according to the latest Origination Insight Report released by Ellie Mae, a provider of innovative on-demand software solutions and services for the residential mortgage industry. Meanwhile, the closing rate for all loans rose for the fourth consecutive month to 62.4 percent, the highest level since Ellie Mae began tracking this data in 2011.
Ellie Mae posts ‘tremendous finish’ to 2014
According to the January Origination Insight Report, the average interest rate for a 30-year fixed rate mortgage fell from 4.251 percent to 4.154 percent, more than a half-percent lower than the January 2014 rate of 4.723 percent. Rates are at their lowest level since July 2013, according to Ellie Mae’s data.
“Homeowners who missed refinancing over the past year because they did not have enough equity in their homes are getting a second chance in 2015,” Ellie Mae President and CEO Jonthan Corr said. “Lower rates and the decision by the FHA to lower the mortgage insurance premium (MIP) are also good news for the purchase market.”
The Origination Insight Report mines its application data from a robust sampling of approximately 57 percent of all mortgage applications that were initiated on the Encompass origination platform.
Other findings of the report include:
- Despite the jump in refinance share, the average closing time for refinances fell from 42 days to 39 days.
- The percentage of closed loans with an average FICO score below 700 dropped from 32 percent in January 2014 to 30 percent last month.
- The average FICO score on closed VA purchase loans and refinances climbed to 704 and 716.