While the time it took to close a loan in June increased just slightly from the previous month, the closing rate reached a record high of 61 percent, according to Ellie Mae's Origination Insight Report.
Among loans originated 90 days before the report, 60.7 percent closed in June, the report states. This is up from 57.8 percent in May.
"Clearly, lenders are working harder than ever to convert and close loans," said Jonathan Corr, president and COO of Ellie Mae.
However, the time it takes to close a loan is on the rise. After three months of increases, the number of days it took to approve a loan closed in June was 41 days. Despite the monthly increases, though, loans are closing faster than last year, when it took 47 days to close a loan.
Refinance loans closed in June took an average of 39 days to close, while purchase loans took 42 days to close.
The market continues to be dominated by purchase loans, although the share of purchase loans did tick down slightly over the month of June, from 66 percent in May to 65 percent in June.
Corr attributes the slight decline to a dip in interest rates, which could have spurred more refinances and "may also have prompted more borrowers to select 30-year fixed rate mortgages, which may be why the percentage of 15-year loans hit lowest points for the year last month."
The average interest rate for a 30-year loan in June was 4.42 percent, down from 4.53 percent in May.
Approved loans continue to go to applicants with high FICO scores. For loans closed in June, applicants had an average FICO score of 728, up slightly from 727 in May but down significantly from an average of 738 over the year last year.
However, close to one-third of loans closed in June—32 percent—had FICO scores under 700. This is unchanged from last June.
Loan-to-value ratios on closed loans have held steady so far this year at 82 percent, and debt-to-income ratio has remained the same since March at 24/37, according to Ellie Mae.
Denied loans in June had lower FICO scores and higher debt-to-income ratios than approved loans, but loan-to-value ratios were the same. FICO scores for loans denied in June averaged 686. Debt-to-income ratios for denied loans averaged 28/45.