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.