Refinances increased in October, representing 47 percent of all closed loans in the month, according to the latest Origination Insight Report released by Ellie Mae. The percentage of FHA refinances increased to 21 percent in October, up from 19 percent in September, and VA refinances increased to 31 percent, up from 27 percent in September.
Conventional refinances also increased to 57 percent, up from 56 percent in September. Refinances were bolstered by the low 30-year note rate, which increased slightly to 3.76 in October, up from a historic low of 3.75 in September.
“We believe that homebuyers are taking advantage of the continued low rates to find monthly savings by refinancing their mortgages,” Ellie Mae President and CEO Jonathan Corr said in a press release.
The average time to close all loans remained unchanged from a month earlier in October at 48 days, although the overall time was up two days from October 2015, when the TILA-RESPA Integrated Disclosure rule first took effect. The time to close a purchase decreased to 46 days, the same level as a year ago, while the time to close a refinance held at 50 days, up five days from October 2015.
The average time to close an FHA loan decreased to 48 days in October, down from 49 days in September, while time to close an FHA refinance held at 51 days. Time to close an FHA purchase loan decreased to 47 days while the time to close a VA loan increased to 52 days.
Closing rates for all loans increased to 73 percent, the highest level in 2016. This is up from 71.8 percent in September. Refinance closing rates increased to 68 percent in October, up from 66.4 percent in September. Purchase closing rates also increased to 77.2 percent in October, up from 76.4 percent in September.
Average FICO scores decreased slightly in October to 730, down from 731 in September. Conventional purchase FICO scores decreased to an average 753 in October, and conventional refinance average FICO scores decreased to 745. The Debt-to-Income (DTI) ratio for all closed loans remained at 24/37, and the Loan-to-Value (LTV) ratio remained at 78.