For the first time in 18 months, slightly more than half of mortgage lenders' volume in January went to refinanced mortgage loans versus purchase money loans, according to mortgage software firm Ellie Mae.
The company's latest Origination Insight Report revealed 51% of the loans that lenders originated through Ellie Mae's Encompass loan origination platform in January refinanced previous home loans.
Ellie Mae said persistently low interest rates and rising home values were responsible for the refinance surge.
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While the number of refinances went up, the average closing time for refinancing loans dropped from 42 days to 39, according to the report. The percentage of closed loans, both refinanced and purchase money, which had credit scores below 700, dropped from 32% in January 2014 to 30% last month.
"Homeowners who missed refinancing over the past year because they did not have enough equity in their homes are getting a second chance in 2015," Jonathan Corr, president/CEO of Ellie Mae. "Lower rates and the decision by the FHA to lower the mortgage insurance premium are also good news for the purchase market."
The Origination Insight Report mines its application data from a sampling of approximately 57% of all mortgage applications that were initiated on the Encompassorigination platform, according to Ellie Mae.
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