In a new report titled “High Demand, Higher Hurdles in the Mortgage Market [1]” issued by Finicity [2], a Mastercard company, 89% of respondents found the loan application was more stressful or as stressful as the home buying experience.
The report [1] examines the issues consumers encounter during the mortgage process, and how digital solutions can streamline the process.
For the study, Finicity surveyed 1,075 consumers, focusing on the current mortgage landscape and the consumer experience of homebuyers or those who have refinanced since April 2020.
“Buying a home should be exciting, not frustrating. And, the loan process can be a seamless end to the home buying or refinancing experience,” said Andy Sheehan [3], President and COO of Finicity, a Mastercard company. “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.”
Major findings of Finicity’s study include:
- 89% of respondents believe the loan application experience was more stressful or equally as stressful as the home buying experience.
- 72% of respondents were surprised or very surprised at the volume of paper processes that still take place in many stages of the mortgage.
- 64% indicated frustration with their initial loan application process, leading to hesitation in refinancing.
And as more processes become automated thanks to advances in both technology and artificial intelligence (AI), respondents voiced their opinion on the role technology plays in the mortgage process.
“Lenders will need to continue to refine the digital mortgage process, and improve functionality to ensure an intuitive and efficient customer experience,” said 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.”
When commenting on the digital side of the mortgage loan process, the survey found:
- Only 12% of respondents indicated that they were uncomfortable turning 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.
- More than half (54%) of respondents said it took between 30 to 60 days to move from application to the closing table, with 16% indicating the process took more than 60 days.
“The most frustrating part of the loan application process for the majority of respondents is connected to the recurring inefficiencies associated with providing physical copies of financial documents,” said the report. “This frustration comes as no surprise when looking at the fact that digital natives make up the largest percentage of survey respondents, with 84% falling between the ages of 18 and 44.”
Click here [1] to read Finicity’s “High Demand, Higher Hurdles in the Mortgage Market” report.