Average credit scores increased on last month’s mortgage production, while averaged debt-to-income ratios declined. The tighter credit conditions came as refinances continued to make up a diminishing share of mortgage production.
The share of loans originated in September that were conventional transactions was 65 percent. Conventional share has thinned from 66 percent the same month in 2017.
A fifth of last month’s production was for residential loans that were insured by the Federal Housing Administration. The share was the same as 12 months previous.
Mortgages guaranteed by the Department of Veterans Affairs
made up a 10th of business, the same as in September 2017, while the remaining 5 percent was classified as “other.”
Those details and more were reported by Ellie Mae Inc. based on transactions that are handled through its platform.
August 2018’s closing rate was 71.7 percent, unchanged from the prior month and hardly changed from a year prior. The closing rate was 72.8 percent on conventional loans, 68.2 percent on FHA mortgages and 68.8 percent on VA transactions.
From start to finish, it took 44 days to close a home loan last month, a day longer than August as refinance turn times slowed by four days. Conventional turnaround was 44 days, FHA closings took 46 days, and VA time tables were 48 days.
FICO scores averaged 727 — rising three points from a month earlier and a year earlier. At the same time, average debt-to-income ratios also tightened, to 25/39 percent last month from 26/39 percent in August.
The tighter conditions like reflect the shift away from refinances, with the 29 percent refinance share reported by Ellie matching the previous low based on data tracking back to August 2011. Refinances tend to have slightly worse credit scores.
No change was noted, though, for average loan-to-value ratios, which were 79 percent.
Credit scores were 733 on conventional refinances and 751 on conventional purchases. FHA scores were 662 on refinances and 677 on purchases, and VA FICO scores were 693 on refinances and 709 on purchases.
Conventional LTV ratios averaged 62 percent on refinances and 80 percent on purchases, and they were 78 percent on FHA refinances and 95 percent on FHA purchases. On VA loans, LTV ratios averaged 90 percent on refinances and 97 percent on purchases.
DTI ratios averaged 24/37 on conventional refinances and 24/36 on conventional purchases.
FHA refinances had 27/43 percent average DTI ratios, and FHA purchases averaged 29/44 percent. VA closings had average DTI ratios of 27/42 percent on refinances and 27/43 percent on purchases.
Refinance share was 31 percent on conventional transactions, 17 percent on FHA mortgages and 27 percent on VA originations.
