Mortgage refinancing grew strongly in February, Ellie Mae said in its latest Origination Insight Report.
The report showed refinancing rose 8 percent to comprise 59 percent of lenders’ loan volume in the month. With the reduction in mortgage insurance premiums from Federal Housing Authority-backed loans dropping to start 2015, refinances were expected to rise.
Refinances were 33 percent of lenders’ loan volume in August 2014, and 43 percent a year ago in February 2014. Meanwhile, the report showed that the average time to close a refinance loan fell to 36 days, which is the lowest level since Ellie Mae began tracking the data in August 2011.
“Considering the demand, the fact that lenders are taking fewer days to close the average refi loan is very good news,” Ellie Mae President and CEO Jonathan Corr said in a news release.
The average interest rate for a 30-year fixed rate mortgage fell to a two-year low of 4.008 percent in Feburary, down from 4.154 percent in January. In addition, the average interest rate for 30-year fixed FHA loans dropped below 4 percent, the report showed. That’s the first time it reached that low since June 2013.
“The drop in the average 30-year fixed rate in last few months has kept lenders busy with increased refinance business,” Corr said.
The Origination Insight Report mines data from a sampling of about two-thirds of mortgage applications initiated on its Encompass origination platform. About 3.7 million loan applications ran through Encompass in 2014.