A smaller share of mortgages in process closed last month compared to March, though the closing rate improved versus the same month last year.
Out of all the residential loans that were closed during April, 64 percent were conventional mortgages. The share slipped from two-thirds the prior month.
Loans insured by the Federal Housing Administration accounted for another 23 percent of last month’s volume, inching up from 22 percent in March.
Nine percent of April’s production was mortgages guaranteed by the Department of Veterans Affairs. VA share was unchanged from a month earlier.
Those details and more were laid out by Ellie Mae Inc. in its April 2016 Origination Insight Report. The results were derived from a three-quarters sampling of applications initiated on the Encompass origination platform.
It took 44 days to process and close home loans funded during April, the same amount of time it took in March. Turnaround, however, was trimmed by a day versus April 2015.
On just refinances, turn times were 44 days, three days longer than in March.
Purchase financing turnaround was unchanged at 45 days.
Time to close conventional loans was 44 days in April 2016, while it took 45 days to close an FHA loan and 48 days to process a VA mortgage.
Of all loans started in the previous 90-day cycle, 68.9 percent had closed as of April 2016.
The closing rate deteriorated from 70.6 percent a month earlier but improved versus 65.2 percent a year earlier.
Refinances had an April 2016 closing rate of 64.6 percent, and purchase-money transactions had a 73.4 percent rate.
Last month’s closing rate on conventional transactions was 69.6 percent. The FHA closing rate was 66.7 percent, while VA mortgages had a 62.8 percent closing rate.
Loans closed last month had an average FICO score of 723. Credit scores were up a point from March but six points lower than in April 2015.
On just conventional loans, credit scores on refinances averaged 732 during April 2016, while they were 753 on purchase transactions.
FHA credit scores averaged 653 on refinances
and 685 on purchases.
FICO scores averaged 707 on VA refinances last month and 705 on VA purchase-money transactions.
Loan-to-value ratios on all loans were 80 percent, no different than a month earlier or a year earlier.
Conventional mortgages had average LTV ratios of 68 percent on refinances last month and 81 percent on purchases.
LTV ratios averaged 78 percent on FHA refinances and 96 percent on FHA purchases.
On VA-guaranteed mortgages, LTV ratios averaged 88 percent for refinancing
and 98 percent for purchase financing.
April 2016’s average debt-to-income ratio was 25/38 percent, the same as in the prior report and higher than 24/38 percent in the year-earlier report.
Last month’s average DTI ratio on conventional refinances
was 25/39 percent, and the ratio was 23/34 percent on purchase financing.
FHA loans had an average DTI ratio of 28/45 percent
on refinance transactions and 27/41 percent on purchase-money transactions.
DTI ratios averaged 24/40 percent on VA refinances and on VA loans to finance a home purchase.
Refinance share fell to 40 percent from 45 percent in March and 47 percent in April of last year.
April 2016 refinance share was 51 percent on conventional mortgages, 19 percent on FHA loans and a quarter on VA mortgages.
