The approval rate for purchase mortgages hit new heights in October as more than two thirds (66.1 percent) of all applications for loans to buy a home were approved.
The approval rate for October was the highest recorded by the four-year old Ellie Mae Originations Insight report; the previous high was 65.1 percent in August. Last year the average approval rate for purchase loans was only 60 percent.
The high approval rate suggests borrowers and lenders are finding ways to overcome tight lending standards that are more difficult for lenders to circumvent following implementation of the QM Rule in January. Tight credit has crippled access to financing for buyers, especially first time buyers, and slowed home sales this year
The October approval rate for conventional loans also hit a new peak at 67.9 percent; its previous top rate was 67.2 percent in January of this year. The approval rate for all loan types in October was 59.4 percent. Only 59.4 percent of refis were given the green light.
The average time to close for purchase loans in 0ctober was 40 days. Purchase loans accounted for 60 percent of all loans closed in
The October 2014 report also found that the average 30-year interest rate for all loans fell for the sixth consecutive month to 4.371 percent purchase loans, reported in Ellie Mae’s October report.