The refinance share of mortgage volume flowing through Ellie Mae's loan origination system jumped to 40% of all transactions in October, up from 36% in September, according to the firm's Origination Insight Report.
The 4% increase was due mainly to historically low interest rates: The average rate for a conventional 30-year fixed-rate mortgage for the month was 4.371%, the lowest since July 2013, the firm reports. The result was the highest volume of refinance activity flowing through its system in six months.
‘Refinancing activity in October was at the highest level since March of this year, thanks largely to the current interest rate environment,’ says Jonathan Corr, president and chief operating office of Ellie Mae, in a release. ‘Low rates are creating opportunities for homeowners to either lower their payments or capitalize on their homes' equity.’
According to the report, 33% of closed loans in October had an average FICO score below 700, compared to 28% in October 2013, indicating that lenders have been loosening their underwriting standards.
Closing rates on purchase loans rose to 66.1%, the highest percentage since Ellie Mae began tracking this data in August 2011.
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