Average FICO Score On Closed Mortgages Fell Again In October

The average FICO score on closed loans in October fell to its lowest level since August 2011, according to Ellie Mae's Origination Insight Report.

The average FICO score for all loan types (refinances and purchases) in October was 722, down from 723 in September, the firm reports. The report is based on lender data voluntarily provided through Ellie Mae's Encompass loan origination system.

It was the fifth consecutive month that the total average FICO score decreased relative to the previous month, Ellie Mae reports.

The average FICO score on conventional purchase loans in October was 754 – down from 755 in September. The average FICO score on refinances was 726 – down from 728.

The average FICO score for a purchase loan backed by the Federal Housing Administration (FHA) in October was 687 – down from 689 in September. The average FICO score for a refinance through FHA was 654 – down from 661.

The report further shows that underwriting hit its loosest level so far this year in October with debt-to-income ratios at 25/39.

Additionally, closing rates remained robust with more than 66% of all loan applications closing for the fourth consecutive month.

The closing rate on purchase loans remained steady at 71%.

‘It is still too early to see if there will be impacts stemming from the Know Before You Owe changes that went into effect just last month,’ says Jonathan Corr, president and CEO of Ellie Mae, in a statement. ‘The time to close loans remained a constant 46 days for yet another month, while the closing rate on purchased loans has stayed above 70 percent. We may begin to see time to close increase in the November data as the new closing disclosures are utilized for the first time.’


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