Veterans home loans guaranteed by the government have grabbed a bigger share of the mortgage market over the past year. Credit scores and income ratios have eased over the same period.
Conventional loans accounted for 64 percent of all mortgages closed in July. The share has
thinned from the same month a year ago, when it stood at 65 percent.
The share of loans that were insured by the Federal Housing Administration was 22 percent. FHA share has also been trimmed from July 2016, when it was 23 percent.
Picking up market share have been mortgages guaranteed by the Department of Veterans Affairs, widening to 10 percent from 9 percent the same month in 2016.
The details, as well as a plethora of rich data, was reported by Ellie Mae Inc. in its July 2017 Origination Insight Report.
Thirty-five percent of all business was refinance. While refinance share was more broad than 32 percent in June, it was thinner than 37 percent in July 2016. Conventional refinance share was 40 percent, FHA refinance share was 21 percent, and the share for VA was 28 percent.
Out of all applications started in the preceding 90-day cycle, 70.6 percent closed last month. The closing ratio improved from 70.3 percent in June but deteriorated from 71.6 percent during July 2016.
Refinance closing rates were 62.4 percent in June 2017. The ratio was far superior on purchases at 76.2 percent. Closing rates were 70.9 percent on conventional mortgages, 69.2 percent on FHA loans and 67.7 percent on VA mortgages.
Time to close was no different than in the last report at 43 days. Three days has been shaved off, however, since the same report last year.
Refinance turns times were 42 days versus 43 days for purchases. Conventional loans took 42 days to close, FHA turnaround was 44 days, and VA time to close was 46 days.
Among loans closed during the latest period, FICO scores averaged 724, the same as the did in the prior report. FICO scores have loosened, however, from 727 a year prior.
On just conventional mortgages, FICO scores averaged 730 on refinances and 753 on purchases. FHA credit scores were 646 on refinances and 683 on purchases, while VA scores averaged 700 on refinances and 711 on purchases.
Loan-to-value ratios averaged 80 percent during July 2017, no different than a month earlier and a year earlier.
Conventional refinance LTV ratios averaged 65 percent, and purchase ratios averaged 80 percent.
LTVs on FHA refinances were 78 percent, while they were 96 percent on purchase transactions. VA ratios came in at 88 percent for refinances and 98 percent for home purchases.
Ellie reported that debt-to-income ratios averaged 25/38, unchanged from the preceding month and more relaxed than 24/38 percent in July of last year.
Conventional refinance DTIs were 25/39 percent, and purchases had an average of 23/35 percent.
At 29/46 percent, DTIs on FHA refinances were less restrictive than 28/43 percent on purchases. DTIs on both types of VA transactions were 25/41 percent.
