The good news is that a bigger share of monthly loan applications converted into closed loans. The bad news that it took longer to close them.
Out of all home loans closed in April, conventional mortgages
accounted for 64 percent. Conventional share thinned from two-thirds the previous month but was unchanged from the same month in 2014.
Loans insured by the Federal Housing Administration made up nearly a quarter of last month’s production, growing from a 22 percent share in both March and April 2014.
The details were derived from Ellie Mae Inc.’s Origination Insight Report. Ellie harvested the metrics from a two-thirds sampling of all applications initiated on the Encompass platform. Around 3.7 million loan applications were run through Encompass last year.
The Department of Veterans Affairs guaranteed 9 percent of April 2015’s production, the same share as the prior month.
Out of all applications initiated during the previous 90-day cycle, 65.2 percent closed in April. The closing rate improved from 63.6 percent one month prior and 55.0 percent one year prior.
The latest closing rate was 64.0 percent on refinances and 66.5 percent on purchases. The closing rate on was two-thirds on conventional loans, 55.0 percent on FHA mortgages and 62.5 percent on VA loans.
Last month’s production took 45 days to close, a day longer than in March and six days more than it took in April 2014. The time table jumped to 48 days for refinances and dropped to 43 days for purchase financing.
Conventional loans took 46 days to close, while turnaround for FHA-insured mortgages was 44 days. It took 46 days to close VA-guaranteed loans.
The average FICO score on April’s originations was 729, two points lower than the previous month but three points higher than the same month last year.
Conventional credit scores averaged 738 on refinance transactions and 756 on purchase financing. They were 682 on FHA refinances and 686 on FHA purchases, while VA refinances had 715 scores and VA purchases had 705 scores.
The average loan-to-value ratio was 80 percent last month. Although that was slightly looser than the 79 percent average the previous month, it was tighter than the 82 percent average as of a year prior.
Conventional LTVs averaged 70 percent on refinances and 81 percent on purchases, while FHA LTVs were 85 percent on refinances and 95 percent on purchase financing. On VA loans, LTVs averaged 88 percent on refinance transactions and 98 percent on purchase transactions.
Debt-to-income ratios averaged 24/38 percent, easing from 24/37 percent in March and also in April 2014.
Conventional DTI ratios were 24/38 percent on refinancings and 22/34 percent on purchase financings. On FHA loans, the ratio was 26/41 percent on refinances and 27/41 percent on purchases. On VA transactions, refinance DTI ratios were 24/39 percent, and purchase DTI ratios were 24/40 percent.
Refinance share slid to 47 percent in April from 53 percent a month earlier but widened from 37 percent a year earlier. Last month’s refinance share was 41 percent on conventional loans, 28 percent on FHA loans and nearly a third on VA loans.
April’s adjustable-rate mortgage share widened to 4.5 percent from 4.2 percent. But ARM share has been slashed from 7.6 percent in April 2014.
