A bigger share of home loan applications closed last month — especially compared to a year ago. Purchase and conventional loans had the best closing rate.
Conventional mortgages accounted for two-thirds of all residential loans that were closed in December 2016. A year earlier, the share was 65 percent.
Another fifth of last month’s production was loans insured by the Federal Housing Administration. The share was lower than 22 percent in December 2015.
Loans guaranteed by the Department of Veterans Affairs made up 9 percent of the latest activity, the same share as a year previous.
The statistics were reported Wednesday by Ellie Mae Inc. in its December 2016 Origination Insight Report. The findings were determined based on a 75 percent sampling of all mortgage applications initiated on the Encompass origination platform.
Of all loan applications started in the previous 90-day cycle, 73.2 percent had closed as of December 2016. The closing rate improved from 72.2 percent the previous month and 67.3 percent a year previous.
On just refinances, the closing rate was 69.6 percent. But the ratio on purchase financing was 77.0 percent.
Conventional mortgages had a 72.3 percent closing rate last month. The FHA closing rate was 69.0 percent, and the rate was 65.8 percent on VA mortgages.
The average loan closed in December 2016 took 50 days to close. Turn times slowed a day from a month earlier and a year earlier. Refinances took 52 days to close last month, and purchase financing took 48 days.
Conventional mortgage turnaround was 50 days in the latest report, while FHA time to close was 49 days, and VA mortgages simmered for 52 days.
FICO scores averaged 726 in the most-recent report, lower than 728 in November but higher than 722 in December 2015.
Credit scores were 739 on conventional refinances and 753 on conventional purchases. FHA loans had an average score of 655 on refinances and 686 on purchases.
VA refinances averaged 709, and VA purchases were 707.
Loan-to-value ratios averaged 78 percent in December 2016, unchanged since September. LTV ratios averaged 80 percent the same month a year ago.
LTV ratios averaged 66 percent on conventional refinances and 80 percent on conventional purchase transactions. FHA ratios were 78 percent on refinance transactions and 96 percent on purchase financing.
LTV ratios on VA refinances were 87 percent, and they were 98 percent on VA purchases.
At 25/38 percent, average debt-to-income ratios were looser than 24/38 percent in November but tighter than 25/39 percent in December of 2015.
The 24/38 percent DTI ratio on conventional refinances were more relaxed than 23/35 percent on purchases. On FHA mortgages, refinance DTI ratios averaged 29/46 percent, and purchase-money ratios were 28/42 percent.
On VA transactions, DTI ratios averaged 24/40 percent on refinancings and 25/41 percent on purchase financing.
Refinance share was trimmed to 46 percent from 47 percent in November. But refinance share widened from 43 percent in the final month of 2015.
December 2016 refinance share was 56 percent on conventional loans, 22 percent on FHA mortgages and 30 percent on VA loans.
“As rates began to increase we saw purchases tick back up in December, signaling the start of a trend we expect to continue into 2017,” Ellie Mae Chief Executive Officer and President Jonathan Corr said in an accompanying announcement.
