Home loans took longer to close last month, and the closing rate deteriorated. Meanwhile, the average credit score moved higher on a month-over-month basis.
Conventional loans accounted for 64 percent of all loans closed during June. The share, which has been the same since April, crept up from 63 percent a year prior.
Residential mortgages that were insured by the Federal Housing Administration made up 23 percent of last month’s originations, off from 24 percent in June 2015.
Funded loans guaranteed by the Department of Veterans Affairs made up just 9 percent, where the share has stood since February 2016. VA share was 10 percent in June 2015.
Those were some of the statistics outlined in the June 2016 Origination Insight Report from Ellie Mae Inc. The report is based on a 75 percent sampling of applications initiated on the Encompass origination platform.
Out of all loan applications started during the previous 90-day cycle, 69.6 percent closed in June. The closing rate diminished from 70.6 percent the prior month but strengthened from 64.2 percent a year prior.
The closing rate on refinances was 64.7 percent. Purchase financing transactions had a much higher closing rate at 73.7 percent.
Conventional mortgages had a closing rate of 70.9 percent in June 2016, FHA’s closing rate was 68.4 percent, and the VA closing rate was
66.3 percent.
It took 46 days to close the average home loan last month, a day longer than in May but two days faster than in June 2015.
Refinance turnaround was 47 days, and purchase financing transactions took 46 days to close.
On conventional mortgages, the time to close was 46 days, while it was 47 days on FHA-insured loans and 50 days on VA-guaranteed mortgages.
The average loan had a FICO score of 726 during the most-recent month. Credit scores tightened two points compared to May 2016 but eased slightly from June 2015, when the average score was 727.
On conventional loans, credit scores averaged 736 on refinance transactions and 754 on purchase-money transactions.
Average FHA FICO scores were
653 on refinances and 686 on purchases.
VA scores averaged 707 on refinances and 708 on purchases.
Loan-to-value ratios on all closings averaged 81 percent in June, no different than in the last report or in the year-earlier report.
LTV ratios averaged 67 percent on conventional refinances and 80 percent on conventional purchases.
FHA LTV ratios averaged 79 percent on refinancings and 96 percent on purchase financing.
LTV ratios on VA refinances averaged 88 percent, and VA purchases had average LTV ratios of 98 percent.
The average debt-to-income ratio for all mortgages was 24/38 percent, the same as a month prior and 12 months prior.
DTI ratios averaged 25/38 percent on conventional mortgages used to refinance, and conventional loans used to finance a home purchase had average DTI ratios of 23/34 percent.
On refinances, FHA DTI ratios averaged 28/45 percent, and purchases had a 27/41 percent average.
VA refinances and purchases both had average DTI ratios of 24/40 percent.
Refinance share tumbled to 34 percent in June 2016 from 37 percent a month earlier and 38 percent a year earlier.
But the trend is likely to reverse given the significant decline in interest rates since last month’s Brexit vote.
Refinance share on conventional mortgages during the most-recent
month was 43 percent, while FHA refinance share was 15 percent and VA refinance share was 21 percent.
