Ellie Mae: Adjustable rate mortgages see uptick in 2017
Not only have FICO scores decreased since January, but interest rates are increasing which is making homeowners locking in their rates even faster with the lower FICO scores. They are also staying away from the 30-year fixed rates because of this.
The 30-year note rose in January while the average FICO scores on refinances dropped across conventional, FHA and VA loans, according to Ellie Mae’s Origination Insight Report.
The average FICO score decreased from 726 in December to 722 in January, while conventional and refinance a FICO scores dropped to 732, down from 739 in December. FHA refinance FICO scores dropped to 651 in January, down from 654 the previous month and VA scores dropped two points to 707 in January.
And rising interest rates are not only leading to homebuyers locking in their rates quicker with lower FICO scores, but also pushing them away from the 30-year fixed-rate mortgage.
“Rates continued to increase in January and with that we began to see an uptick in adjustable rate mortgages, a trend that we will watch throughout the year,” said Jonathan Corr, Ellie Mae president and CEO. “Additionally, FICO scores began to drop slightly across the board while closing rates remained high as homebuyers locked in rates to close their loans.”
Home loans for purchases decreased slightly during the month, down one percentage point to 53%, however refinances increased one percentage point to 47%. read more… housingwire.com