Refinance loans rise on lower interest rates in September

Register now

The percentage of refinance loans rose to 38% in September as interest rates dipped to their lowest level in 2017, according to Ellie Mae's Origination Insight Report. Last month, refinances comprised 35% of total loans.

The average time to close a refinance loan dropped to 40 days from 50 a year ago, the smallest this figure has been since February 2015.

"The increase in refinances was most likely due to interest rates on closed loans dipping to 4.21%," said Jonathan Corr, president and CEO of Ellie Mae, in a press release.

"Additionally, the time to close a refinance dropped to 40 days as more lenders leverage technology to close loans faster."

September's 4.21% average 30-year note rate fell from 4.27% in August, but is up from 3.75% a year ago.

Purchase made up 62% of loans in September, down month-over-month from 65%, but up eight percentage points from 54% during the same period last year.

Overall, closing times for all loan types increased to 43 days in September from 42 in August, but are still five days shorter than a year ago. The time to close a purchase loan increased by one day in August to 44.

About 69% of all closed loans had FICO scores over 700 in September. With 33.41%, the bulk of purchase loan borrowers had scores between 750 and 799, and 30.06% of refinance loan borrowers had scores in the same range.

The average FICO score for all loan types remained at 724 for the fourth consecutive month in September.

For reprint and licensing requests for this article, click here.
Purchase Refinance Mortgage rates Credit scores Ellie Mae