Challenging Mortgage Process Still Poses an Issue in Current Competitive Housing Market


Finicity has released its new “High Demand, Higher Hurdles in the Mortgage Market report,” revealing key findings around the issues consumers face during the mortgage process and how digital solutions are starting to provide relief.

According to the report, 89% of respondents find the loan application was more stressful or as stressful as the home-buying experience.

“Buying a home should be exciting, not frustrating. And, the loan process can be a seamless end to the home buying or refinancing experience,” says Andy Sheehan, president and COO. “In this digital era, mounds of paperwork and lengthy processes should be a thing of the past. Many lenders do offer a partial digital loan process today, but that doesn’t mean that the customer experience is always better. Friction in the process can still remain.”

To uncover the current pain points of the homebuying and refinancing experience, Finicity conducted a survey of 1,075 consumers, focusing on the current mortgage landscape and the consumer experience of homebuyers or those who have refinanced since April 2020.

“Lenders will need to continue to refine the digital mortgage process and improve functionality to ensure an intuitive and efficient customer experience,” continues Sheehan. “Open banking data provides digital verification of assets, income and employment that can drive satisfaction, reduce risk and costs in the short term, and increase customer loyalty in the long term.”

With demand skyrocketing along with prices, finding the right house is extremely challenging in the current market. Finicity’s survey results indicate the loan experience to be just as or more stressful for most respondents. In the survey, 89% of respondents believe the loan application experience was more stressful or equally as stressful as the home-buying experience. Also, 72% of respondents were surprised or very surprised at the volume of paper processes that still take place in many stages of the mortgage. In addition, 64% indicated frustration with their initial loan application process leading to hesitation in refinancing.

The mortgage process is behind in its digitization compared to other daily tasks and areas of finance such as payment and banking apps. Moving to a digital loan process provides ease to, and even is expected of, consumers. Only 12% of respondents indicated that they were uncomfortable permissioning their personal financial data to a lender. Borrowers who used digital verifications were half as likely to say the loan process was the most stressful part of the home buying experience.

Consumer-permissioned open banking solutions allow for digital verifications throughout the mortgage process, shaving days off the entire experience. Over half (54%) of total respondents said it took between 30 to 60 days to go from application to close, with 16% indicating more than 60 days. Through the use of digital verifications, consumers can have a seamless experience that skips the paperwork and saves them time overall.

Read the full report here.

Image: “Guptill House in Sarasota Florida” by trishhartmann is licensed under CC BY 2.0

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