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First mortgage originations stayed above 2 percent to close 2016, according to the latest Consumer trends report by Equifax. The total number of new loans originated was about 7 million, an increase of just below 9 percent from the same time period a year ago.
The total balance of new loans in that same time was $1.69 trillion, an increase of 13.8 percent. Equifax found that there were more than 326,300 new loans originated for borrowers with low-credit, a year-over-year increase of 9.5 percent. In that same time, the total balance of new loans was $54.7 billion, an increase of 15.6 percent. Of all new first mortgages, 4.7 percent were issued to low-credit borrowers.
The total number of new home equity installment loans originated in Q4 was 689,400, an increase of 4.5 percent from the year prior. The total balance of new loans in that same time was almost $23 billion, an increase of 3.5 percent.
According to Equifax, there were more than 71,000 new loans originated for borrowers with below average credit, a year-over-year increase of 2.7 percent. In that same time, the total balance of new loans was $1.54 billion, an increase of 7 percent. Of all new home equity installment loans, 10.3 percent were issued to low-credit borrowers, a slight decrease from the previous year’s share (10.5 percent).
In terms of home equity installments, “total origination numbers are increasing slightly, but they aren’t matching the payoff rates,” said Amy Crews Cutts, chief economist at Equifax. She added that home equity installment loans tend to be more appropriate for borrowers with low credit scores.
The total number of new revolving HELOCs originated in Q4 was 1.2 million, up 4.6 percent from a year ago. The total balance of new loans in that same time was $132.6 billion, which was an increase of 9.1 percent.
Equifax reported that there were 17,800 new HELOCs originated for borrowers with low credit, a year-over-year increase of 5.6 percent. In that same time, the total balance of new loans was $706.2 million, an increase of 16.9 percent. Overall 1.5 percent of all new HELOCs were issued to low-credit borrowers.
