What are Home Owners' Biggest Issues with the Mortgage Application Process?

Key Findings From The Survey

33% of borrowers say the length of the approval process was the most challenging aspect.
29% struggled with understanding mortgage terms and conditions.
25% cited document collection and submission as a major pain point.
72% of borrowers stated they prefer a fully online mortgage process.

Despite the rapid adoption of digital tools in the mortgage industry, borrowers are still struggling.

An exclusive new survey from Flatworld Solutions reveals that outdated mortgage processes continue to frustrate applicants even in supposedly modern, digital-first environments.

The survey was conducted among 400 US adults who have purchased a home and gone through the mortgage process in the past 24 months, reflecting a broad range of borrower experiences in a highly digitized but still friction-heavy lending environment.

These pain points expose lenders to higher drop-off rates, reputational risk, and reduced borrower loyalty.

Digitization without design is just decoration. Borrowers don't want tech for tech's sake—they want clarity, speed, and control,” says Rajeev Kumar, Executive Vice President, Flatworld Mortgage Solutions.

Who Wants a Fully Online Mortgage? The Answer: Nearly Everyone.

72% of borrowers say they'd prefer a mortgage process that is entirely online, without speaking to a person
That preference spans age and income groups. The correlation between age and digital preference is just -0.09, and with income, only 0.04.

This means that digital preference is universal - not generational or financial.

Where Is the Mortgage Process Still Breaking Down?

Even with digital tools in place, key steps in the mortgage process are still causing delays and frustration.

31.5% of borrowers said underwriting and approval was the longest part of the entire process - often taking days or even weeks with little visibility.
29.5% pointed to document submission as another major bottleneck, especially when lenders require repeated uploads or unclear formatting.
23.3% found closing to be the most time-consuming step, often slowed by last-minute checks or third-party coordination.

These numbers show that digitization hasn't streamlined every step - it's just moved the friction to new points in the workflow.

What's Causing Confusion and Delays for Borrowers?

Borrowers aren't just waiting - they're repeating themselves. And many still don't fully understand what they're signing up for.

36.3% said they had to resubmit the same documents multiple times, often due to outdated systems or unclear instructions.
34.5% reported that mortgage terms were difficult to understand, indicating a clear need for plain-language explanations and better guidance.
26.8% experienced unexpected delays during closing, while 22.3% were frustrated by a lack of transparency in key moments.

What Should Lenders Automate First?

When asked what should be automated, borrowers pointed to -

Document collection and submission (18% of borrowers surveyed)
Closing/signing (18% of borrowers surveyed)

Many also wanted automation in income verification, credit analysis, and underwriting. These are the bottlenecks—and borrowers know it.

What Portal Features Do Borrowers Actually Want?

When asked what would improve the digital mortgage experience, borrowers favored real-time, self-serve options, including.

Real-time application status updates (58.8% of borrowers surveyed)
Real-time document review and confirmation (55% of borrowers surveyed)
Document upload functionality (52.5% of borrowers surveyed)

These features show a clear demand for visibility and control. Lenders can improve trust and reduce the work-load of Loan Officers and Processors by investing in smarter borrower-facing portals,” states Kumar.

Why Borrowers Still Feel Lost

Digital tools are often bolted onto legacy workflows instead of reimagining the borrower journey. As a result, friction remains—just with new interfaces.

Resubmission of documents points to internal silos and poor system integration.
Difficulty understanding terms reflects a failure of borrower education and user-first communication.
Delays in underwriting and closing suggest that manual review still dominates core parts of the workflow.

Many lenders may believe that e-signatures and digital portals check the 'digital transformation' box. But if those systems are clunky, opaque, or still require multiple human touchpoints, borrower frustration will remain high,” said Kumar.

What's next

To meet modern expectations, lenders must do more than digitize - they must simplify.

Embed clarity- Use plain-language explanations and visual aids to explain terms.
Streamline documentation- Invest in intelligent document capture and eliminate duplication.
Track and notify- Offer real-time status updates, timelines, and borrower alerts throughout the process.

The mortgage experience should feel like ordering from Amazon, not applying for a government grant. Lenders who get this right will win the next generation of borrowers,” said Kumar.

Methodology

This survey was conducted in March among 400 US adults who have purchased a home and gone through the mortgage process in the past 24 months. Respondents were asked about specific challenges, process pain points, and overall satisfaction with the mortgage application experience. The sample reflects a diverse cross-section of borrowers in the current market.