January Refinacing Share was 18 Month High

Loans for home refinance made up 51 percent of all loanrnoriginations in January, an 8 percent jump compared to December.   ElliernMae’s Origination Insight Report saidrnthis was the highest share refinancing has had in more than 18 months.  </p

Refinancing hit a low at 32 percent inrnJuly but as interest rates retreated from early 2014 highs, the share of refinancingrnincreased steadily.  In all of 2014rnrefinancing averaged a 38 percent share of originations.  Despite the jump in volume, the average time tornclose a refinance loan fell from 42 days to 39 days.</p

Ellie Mae said the closing rate for allrnloans rose for the fifth consecutive month to 62.4 percent, the highest levelrnsince Ellie Mae began tracking this data in 2011.  The closing rate on refinancing was 56.5rnpercent and for purchase loans 68.3 percent. rn</p

“Many home owners who put off refinancing over the past year because they didrnnot have equity in their homes are getting a second chance in 2015,” saidrnJonathan Corr, president and CEO of Ellie Mae. “Low rates and the decision byrnthe FHA to lower the mortgage insurance premium (MIP) are good news for the purchasernmarket as well.” </p

The refinancing share of conventionalrnloans was even higher than the overall share at 62 percent.  However purchase loans dominated with bothrnFHA and VA originations.  Purchases madernup 82 percent of the former and 58 percent of the latter.</p

Conventional mortgages had a 70 percentrnshare of the total market compared to 67 percent in December while the FHArnshare dropped to 15 percent from 20 percent. rnVA lending was 11 percent of the market, unchanged since October.<br /<br /The percentage of closed loans with an average FICO score below 700 droppedrnfrom 32 percent in January 2014 to 30 percent last month and the average scorernfor all loans was 731, 5 percentage points higher than the overall 2014 average.rn The FICO score on closed VA refinance loansrnjumped 8 points from December to 716 and rose from 701 to 704 for purchase mortgages.</p

The OriginationrnInsight Report mines Ellie Mae data from a large sampling of the approximatern57 percent of all mortgage applications which are initiated on its Encompass®rnorigination platform.

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