Average FICO Score On Closed Loans Fell To 722 In January


Mortgage credit apparently loosened somewhat in January, at least in terms of the average FICO score on closed loans, according to Ellie Mae’s Origination Insight report.

The report shows that the average FICO score for all closed loans was about 722, which is the lowest it has been since March 2016.

That’s down from an average of 726 in December and 728 in November.

The refinance share of closed mortgage loans flowing through the company’s Encompass mortgage lending platform reached 47% in January – up slightly from 46% in December. That’s probably due to two factors: 1) mortgage borrowers realizing that this is probably their last chance to capitalize on lower rates before they start rising again later this year, and 2) the fact that rates dipped back down during the first few weeks of January, after increasing in December.

The average time to close a mortgage loan, for all loan types, increased to 51 days, which is the highest it has been since at least September 2015 (i.e., prior to the implementation of the Consumer Financial Protection Bureau’s TILA-RESPA Integrated Disclosure rule on Oct. 3, 2015).

The time to close a refinance increased to 53 days, while the time to close a purchase loan held steady at 48 days. This is likely due to lenders cutting back on resources in their refinance departments in anticipation that rates will continue to increase later this year.

The closing rate on all loans was about 72.2%, down from 73.2% in December. Closing rates on refinances were at about 67.9%, while closing rates on purchases decreased to about 76.8%, down from 77.0%.

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