Home buyers taking out a purchase mortgage to buy a home have been more successful than homeowners seeking to refinance. Some 61.7 percent of home buyers were approved for a mortgage in February compared to 54.7 percent of refinancing homeowners.
The data show almost only a slight decline in only one of the three key factors lenders use for mortgage approvals: FICO scores, loan to value ratios and debt to income ratios. Loan to value ratios have risen to 80 today compared to 76 a year ago, an increase of 5.2 percent but median FICO scores for all approved loans are less than one percent lower than they were a year ago, down from 750 to 745. Debt to income ratios are exactly the same as a year ago: 23 percent and 35 percent when mortgage payments are included.
Despite the improved percentage of approvals, mortgages are taking a little longer to process than a year ago. Purchase loans took 47 days to close in February, slightly longer than the 45 days it took a year ago. Refinancings are taking significantly longer today than a year ago, 50 days compared to 44 days.