It wasn’t exactly a mess, but homeowners have been ramping up their refinancing activities over the past two months when they saw interest rates begin to rise slowly but steadily. The February Origination Insights Report
from ICE Mortgage Technology shows that the refinancing rate of all loans taken out during the month increased by one point to 68 percent. This is an increase of 8 points compared to the share of 60 percent in December. The conventional loan portion of the refinancing has increased by 7 points in the last two months. According to ICE, a refinancing share of 68 percent cannot be seen since December 2012.
The 30-year interest rate for all closed-end loans and conventional loans increased by 1 basis point compared to the previous month to 2.89 percent and 2.92 percent respectively. The 30-year interest rates for FHA loans remained constant at 2.86 percent and for VA loans unchanged at 2.60 percent.
“Homeowner continue to take refinancing steps as long as interest rates remain low“said Joe Tyrrell, president of ICE Mortgage Technology.” In February, borrowers used refinance more than in nearly a decade. ”
Tyrrell added, “We also saw days when a loan had to be cut in February as lenders continued to use technology to manage large volumes of loans and improve operational efficiency.”
The The deadlines for closing have shortened considerablyfor all loans from 58 days in January to 53 days in February. Refinance turnaround time averaged 52 days from 59 the previous month, and purchase times decreased by 4 days to 53 days. Similar efficiency gains were observed in conventional, FHA, and VA origins.
The closing rate for all loans increased 2 basis points to 76.4 percent. The refinancing rate rose almost 2 full points to 76.3 percent, while the interest rate on purchase loans fell from 78.9 percent to 77.1 percent. ICE calculates completion rates from a sample of applications submitted 90 days before or in November 2020.
The Origination Insight Report is derived from a sample of approximately 80 percent of all mortgage applications initiated on the ICE lending platform. The company says its report is a strong indicator of the underwriting standards used by lenders across the country.