Mortgage software firm Ellie Mae reported Wednesday that 61% of mortgage loans originated through its lending platform in June went to purchase money loans, and in addition, lenders' closing rates on all purchase loans had reached 69%.
That means June was the first month since October 2014 during which purchase money loans accounted for 60% or more of mortgage loans in a given month. June also saw the highest level of purchase loan closing rates since Ellie Mae began tracking origination data in August 2011, the Pleasanton, Calif.-based firm said.
Ellie Mae reported the news in its Origination Insight Report for June. The company creates the report from examining roughly 66% of mortgage loan applications processed through its Encompass mortgage management platform. Since roughly 3.7 million applications ran through Encompass in 2014, and given the firm's market share, Ellie Mae said it believes its data provides a strong proxy for mortgage data generated across the U.S.
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"With a surging housing market and U.S. home sales at their highest level in years, lenders remained busy in June," Ellie Mae President/CEO Jonathan Corr said. "The improving closing rate is a continued sign that borrowers are being approved and following through with purchases."
The report also revealed that while June 2015 marked a return to a yearly high for purchase money lending, purchase money loans still did not comprise as big of a percentage of mortgages this past June as they had in June 2014. In June 2014, purchase money loans accounted for 65% of mortgage loans.
In addition, purchase money loans closed a full seven days, on average, more quickly than loans that refinanced existing mortgages did – a complete reversal of the spread from one year ago.
In June 2014, refinanced loans took, on average, 39 days to close versus 42 days for purchase money loans. However, by December 2014, they both took, on average, 42 days. By May 2015, refinanced loans took 49 days to close compared to purchase money's 43 days prior to June of this year, when refinanced loans took 52 days to close compared to purchase money's 45 days, the firm reported.
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