Lenders closed on a greater share of mortgages last month compared to February—and they did it at a faster pace, according to mortgage software provider Ellie Mae.
The company’s latest Origination Insight Report, released this week, shows that out of a sampling of loan applications initiated 90 days prior to March, 58 percent closed last month. That rate is up from 55.3 percent in February and from the 2013 average of 54 percent.
At the same time, the average time to close in March fell to 40 days for all loans (37 for refinances and 41 for purchase mortgages), down by one day compared to February and the second month in which closing time quickened.
March closings were split 60–40 in favor of purchase share, with that segment continuing to gain ground against refinances.
“We continue to see the resurgence of a purchase-centric market as numbers inch closer to historical levels,” said Jonathan Corr, president and COO of Ellie Mae. “Purchases increased another three percentage points in March 2014 to represent 60 percent of loans, quite the difference from March 2013 when purchases represented only 38 percent of loans.”
The share of adjustable-rate mortgages (ARMs) also picked back up following a slight decline in February, rising to 7.4 percent. Last March, ARMs accounted for only 2.5 percent of closed loans.
Meanwhile, credit conditions tightened just slightly. According to Ellie Mae’s data, the average FICO score on all closed loans in March was one point up to 725, the first increase of the year. The average loan-to-value ratio (LTV) was flat for the fourth straight month at 82, while the average debt-to-income ratio (DTI) tightened slightly on both the front and backend, falling to 24/37.
For denied applications, the average FICO score was 689 (the same as February), the average LTV was slightly down to 81 percent, and the average DTI fell slightly on the back to 28/44.