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Orange County homeowners have paid an estimated $2.340 Billion in origination fees to attain a purchase and refinance loan on their homes from 2011 - 2014. We review how many mortgages were originated, the average loan amount and what borrowers paid in fees each year.
Despite having declared a chapter 9 bankruptcy in 1996, Orange County has experienced a tremendous recovery. OC, as locals call it, has 6 of the top 10 most livable cities in the state of California based on a measure of commute time, crime, high school graduation, unemployment and overall quality of life. It is a popular destination for families in southern California looking to set down roots as well as a tourist destination for the beaches, and amusement parks, such as Disneyland.
In this article, we will specifically discuss the purchase and refinance of mortgage loans in Orange County. You will learn how many purchase and refinance loans were originated from 2011 - 2014. You will also learn what the average loan amounts were, what the total loan volume was and how much in origination fees were paid by homeowners from 2011 - 2014.
We took a close and exhaustive look at mortgage loan origination data derived from the CFPB website in relation to the Home Mortgage Disclosure Act (HMDA), which is a United States federal law that requires certain financial institutions to provide mortgage data to the public.
The data we reviewed spans the years 2011 - 2014 and includes all residential purchase loans and refinances in Orange County. The data we retrieved includes originated loans for one-to-four family dwellings, manufactured housing and multifamily dwellings.
The HMDA defines a multifamily property as a residential structure that houses five or more families. A structure is classified as a one-to-four family property if it houses fewer than five families, it also includes individual condominiums or cooperative units.
Real estate purchase loan activity has been relatively stable in Orange County, with a total of 96,571 purchase loans from 2011 - 2014 according to HMDA data. The year 2014 had 25,203 purchase loans originated. The chart below will visualize the data for purchase loans for this four year time span.
Orange County is one of the more expensive counties in the state of California. The average purchase loan amount is relatively high when compared to other states in the U.S. In 2014, the data suggests that the average purchase loan amount in Orange County was $529,723. The graph below outlines the average purchase loan amounts for the four year time span.
The total mortgage purchase loan volume in Orange County from the years 2011 – 2014 was $46,073,013,000. The table and chart below will show the loan volume for purchase loans in Orange County for the four year time span.
Orange County mortgage refinance activity in 2014 was less than half of what it was in 2013. Orange County saw a total of 285,774 mortgages refinanced from 2011 – 2014 according to HMDA data. The year 2014 had 34,406 refinanced mortgage loans originated. The chart below will visualize the data for refinance activity during this four year time span.
California has a tremendous amount of activity with regards to mortgage refinances. There is no doubt that it is an extremely lucrative part of the mortgage lending business within the state, but as you can see from the chart above, the number of loans refinanced has decreased substantially from previous years. According to the data, the average refinance loan amount Orange County was $451,342 in 2014. The graph below outlines visualizes the average mortgage refinance loan amounts during the four year time span.
Our research into the data reveals that refinance loan activity has been more than double that of purchase loan activity in Orange County when considering the total for all four years. The total mortgage refinance loan volume from years 2011 – 2014 was $109,947,087,000. The table and chart below will show the loan volume for purchase loans in Orange County during the four year time span.
Based on our research, we have found that the majority of new and existing homeowners use the services of traditional mortgage lenders and mortgage brokers to help them attain a new purchase loan or refinance their existing home loan. The majority of mortgage customers pay within a range of 0.50 – 2.5 percent of the loan amount as the origination fee, depending on each borrowers unique credit qualifications.
For our intents and purposes, we will use the middle of the range to approximate that mortgage loan borrowers in Orange County paid 1.50 percent of their loan amount in origination fees. Using this figure, from the years 2011 – 2014, purchase loan borrowers paid a total of $691,095,195 in origination fees and refinance loan borrowers paid a total of $1,649,206,305 during the four year period.
The following graph will visualizes and compares how much in origination fees were paid by borrowers to attain purchase loans and refinance loans from 2011 – 2014.
It’s important to keep in mind that the fees we have discussed here are simply for the charges a borrower pays to lender or broker to originate the loan for them. This lender/broker fee typically includes an administrative fee, an application fee, an underwriting fee, document preparation fees and other smaller fees which amount to approximately 1.50 percent of the loan amount, based on our estimations.
Every mortgage loan process also has other fees in addition to origination fees that fall under the closing cost category, such as escrow services, title insurance, mortgage insurance, notary fee, appraisal fee, document recording fees and other smaller fees as well. Depending on the size of your loan, the type of property and the particular state and county you are in, these fees can amount to another 1 - 2 percent of the loan amount in addition to the origination fee. You can use this closing cost calculator to get a better idea of what you can expect to pay when looking for a purchase mortgage or a refinance.
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