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Loan Declined After Pre approval | 27 Ways to get Unconditional Approval 🔥

This guide will explain why your loan got declined and how to get unconditional approval

Check to see if you are eligible for a home loan

This guide will explain why your loan got declined after pre-approval.

The best part?

I’m going to show you 27 techniques for turning around that decline and get unconditional approval – that are working right now (in 2022).

In short: if you want to get your Home Loan approved, you’ll love this guide.

Let’s get started.

Reasons why your home loan could be declined

1. Switching Jobs

Even though you might be earning the same money (or MORE) some banks will decline your loan after your pre-approval if you have recently switched jobs.

loan declined switching jobs

This is because (some) banks want to see you in your role for at least 6 months, and don’t like it if you have a history of lots of jobs over the short term.

Case Study: Newly employed Casual Worker with less than 1 month in the job

For example, Laura was working at Electronic Boutique full time for the past 2 years which is where she was working when her loan was pre-approved.

Since then Laura moved to JB Hi-Fi getting paid more on a casual basis. Her income has gone up since she is casual and getting extra pay on Sunday and late night during the week.

Her bank declined her loan after the original pre-approval as she switched jobs and had been casually employed for under 12 months (even though she was getting paid more!!).

Our Mortgage Brokers were able to get Laura’s loan approved with another bank, who took into consideration her 2 years experience in the industry and did not have a minimum work period for casual employment.

Each bank has its own credit policy on switching jobs, if you have changed jobs after your pre-approval its ok, chat to the Home Loan Experts at Hunter Galloway to see if your bank will accept that and what your loan options are.

2. A contractor for less than 12 months

Contractors usually fall into two categories:

  • 🚧 PAYG Contractors, or
  • 🚧 Self Employed Contractors.

PAYG Contractors are employed on a fixed term, short term or long term contract ordinarily with an end date but in some cases with automatic extension period and includes sick leave and holiday pay.

Self Employed Contractors ordinarily are registered as sole traders, have an ABN and cover their own expenses like wages, superannuation and insurances.

Contractor Home Loans

In either scenario, some banks do not like giving loans to Contractors with Less than 12 months in their current role.

Case Study: Contractor with less than 6 months on his contract term

Kate & Thomas are wanting to apply for a loan. Thomas has been working for the same employer for the past 3 years, and 4 months ago he switched to be a contractor as it offered a higher rate of pay.


Thomas’ contract only has 2 months left to run, as it was initially a 6-month contract. He is also considered a self-employed contractor because he invoices his employer each month and his existing bank declined his home loan…


Our Mortgage Brokers were able to get Tom’s loan approved with a major bank, we used Tom’s new contract income rate (which was 35% higher than previous years) and helped him borrower to a higher amount than if he was relying on his old income.

Contractor income

Each bank has its own credit policy on Contractor Income, if you get paid by Contract Income its ok, chat to the Home Loan Experts at Hunter Galloway to see if your bank will accept that and what your loan options are.

Read More: How to get a Home Loan on Contractor Income [updated 2019]


3. Declined after Assessment Rate Change

When you apply for a pre-approval, the banks don’t use today’s interest rate to determine your serviceability or how much you can borrow they use an assessment rate.

The assessment rate is normally 2-3% higher than the current interest rates you are paying today, to ensure there is enough buffer for when interest rates rise down the track and ultimately ensure you will be able to make these payments in the event of future rate rises.

Think of it as a stress test for your overall financial situation.

Loan Assessment Rate

Unfortunately, the banks don’t make their assessment rates available to the general public, so its hard to know if you are going to pass or fail their serviceability test until you either speak with a mortgage broker, or when you are doing your pre-approval application with the bank…

And this is where it can go wrong, you may have done a pre-approval when the assessment rate was lower, and your borrowing capacity was higher – but it has since changed – and this can make all the difference.

For example, a single borrower with an annual income of $70,000 (and no debt) can borrow around $565,000 with an assessment rate of 5.50%. However when assessed at 7.00% can only borrow $470,000 meaning a reduction in borrowing power of over $95,000!

For some home buyers with a pre-approval, this difference in the assessment rate could mean that your pre-approval gets declined without your income, or situation changing!

If you are concerned about being declined after the banks assessment rate changes, it might be worth clarifying with your mortgage broker if your bank will re-assess the assessment rate when you find a home, or if they will honour it at the time of pre-approval as this can make a massive difference in a rising interest rate environment.

4. Being Self Employed

Some banks make getting a Home Loan when you are self-employed really tough…

But, not all banks dislike being people who are their own bosses.

In fact:

We find over 89% of our self-employed clients home loan options through the major banks.

Common reasons we find the banks decline self-employed home loans include over 20% increase (or decrease) in profit between financial years and the current tax years financials and returns haven’t been prepared yet.

But did you know not all the banks have the same cutoffs for when your FY18 financials are required?

Case Study: Self Employed Business Owner who hasn’t completed most recent years tax returns

Sally and Erica have been running their wedding photography business for over 18 months. It has been extremely profitable and they want to get an investment home loan together to grow their portfolio.


The business has experienced really strong growth of over 142% growth in profit, with a small profit in the first (partial) financial year and a really good profit in their second financial year.


Their bank has rejected their home loan as they have been self employed for under 2 years, and said they wouldn’t accept the most recent years income when they applied for a loan the bank would use an average of both years profit which calculates to a very small amount.


Our Mortgage Brokers were able to get Sally and Erica a loan approved with a major bank, we were able to provide the FY17 Tax Returns, and Financials working off the most recent years profit.

Each bank has its own credit policy on Self Employed Income, if you are a business owner you can qualify for a loan, chat to the Home Loan Experts at Hunter Galloway to see if your bank will accept that and what your loan options are.

 Bank 1Bank 2Bank 3
Tax Returns RequiredFY17 + FY18 Tax Returns and FinancialsFY17 Tax Returns OnlyFY17 + FY18 + Management accounts for FY19, tax returns and financials
How to calculate net profitAverage of FY17 + FY18Most recent years net profitLower of FY17 o FY18


Read More: Self Employed Finance Options for Business Owners

5. Type of Occupation

The banks view different industries, and in particular different occupations with varying degrees of risk.

For example, an underground coal mine worker is considered a bit riskier than a high school teacher.

During the recent mining downturn, we found (some) banks increased scrutiny around employers and the type of employment contract.

Loan Declined Unique Job

The same is with Farmers, Sex Workers or Seasonal Workers whose income can be very strong one year and low the next – and there have been alleged cases of banks discriminating against different types of occupations.

Again different banks have different appetites on this, chat to the Home Loan Experts at Hunter Galloway to see which banks will accept your occupation and what your loan options are.

6. You went on holidays

When you are employed full time, you are given 4 weeks paid holidays and sick leave.

But, if you are casual or a contractor you are not given holiday pay.

Loan declined going on holidays

For example, if you are a Relief Teacher.

While you might be paid more as a Relief Teacher during the year, if you applied for a loan over the December Christmas holidays your payslips might not show a whole lot until you go back in January.


The bank will need your most recent payslip when going for your final (unconditional) approval, and if that payslip has nil income, or a lower amount they bank will annualise this figure to work out your pay.


And with this figure being lower your borrowing capacity is also reduced and could cause your home loan to be declined.


We have access to banks which will look at your annual earnings, and take into consideration your total income earnings for the past year so arrange a free assessment with one of our Home Loan Experts to see what you can borrow.

Each bank has its own credit policy for Casual Income earners, if you are a Relief Teacher or Casual Work you may qualify for a loan using your tax returns or PAYG group certificates, chat to the Home Loan Experts at Hunter Galloway to see if your bank will accept that and what your loan options are.

7. Overtime, shift loading, bonuses or salary sacrifice

Some banks will only consider 50-80% of your overtime and bonus income, and will not add back any salary sacrifices you make like additional payments to superannuation.

Loan declined overtime shift loading

An example of this is for Nurses.

Overtime and Shift Loading makes a large part of the income paid to Nurses due to the nature of the job and not being able to use this income can really reduce your overall borrowing capacity.


If you worked nights one month, and days the next your income could be way lower than when your loan was originally pre-approved, causing the bank to decline your loan due to the decrease in pay.


Not all banks get that as a Nurse you spend large amounts of time on shift work and earning shift penalties are an essential part of your income.


At Hunter Galloway, we work with several banks and lenders that understand that overtime is a core function of your remuneration as Nurse (or other roles that are paid Overtime) and can use100% of your overtime income.

To use this income we will need:

  • ✅ Your 2 most recent payslips
  • ✅ Your most recent years PAYG group certificate
  • ✅ In some cases, we may need a letter from your employer confirming you have been receiving regular overtime for the past 1-2 years.


Type of IncomeBank ABank BBank C
Overtime100% can be usedUnacceptable80% can be used
Bonuses100% can be used if > 12 months historyUnder 2 years unacceptable80% can be used
Salary SacrificeCan be added back to income if discretionaryUnacceptableCan be added back to income if discretionary

8. Uber income, or second job not being accepted

Working as an Uber Driver (or Ola, GoCatch, Lyft or Shebah), and having a second job can help increase your borrowing capacity…

…But not all banks will accept this income!

Some banks will only accept 50% of the income you make as an Uber Driver, or in your second job.

Loan declined uber investment property

So how can you get this income accepted?

The banks will want to see at least 12 months proof of Uber income, or your second job to show that it has been consistent over this period.

Type of IncomeBank ABank BBank C
Uber Income, Or Second Job IncomeMost Recent Years Tax ReturnLowest figure from your last 2 years tax returnsAverage figure from your last 2 years tax returns

To use this income we will need:

  • ✅ Your Most Recent Years Tax Return
  • ✅ Your Most Recent Years ATO Notice of Assessment
  • ✅ Business Activity Statements (BAS), 6-12 months Business Account Statements

9. Taking on an extra credit card

When taking out your pre-approval the bank would have done a serviceability calculation to determine your maximum borrowing amount.

In other words, based on your income minus your credit cards at the time you got your pre-approval the bank calculated the maximum amount they would lend you.

Loan declined credit cards

If you are applying for this amount, and have gotten an extra credit card or got a car loan the bank may decline your pre-approval because you do not fit inside their calculators.

Those 100,000 QANTAS frequent flyer points aren’t looking so hot now…

This is completely fixable, different lenders have different borrowing capacity calculations as you can see below the same borrower on the same income can borrow an extra $40,000 from the highest to lowest bank. 

First home buyer borrowing capacity

Other ways to increase your borrowing capacity:

  • ✅ Reduce unused limits on your credit cards
  • ✅ Close AfterPay and other Personal Loans
  • ✅ Look at other banks who have different capacity criteria

Read More: How do I increase my borrowing capacity?

10. Too many credit enquiries

If it wasn’t enough being too young, too old, or looking for a unique property the banks also regularly decline home loan applications because you may have had too many credit enquiries in the past 12 months.

In other words, if you have had more than 2 or 3 enquiries in the last 6 months the banks could give you a bad credit score, and reject your home loan.

The thing that really sucks is that you don’t get credit enquiries from just applying for credit cards!

Any time you get a new phone plan, change electricity providers or get AfterPay a credit check is done!!

Loan declined credit enquiries

Fortunately, there are banks and lenders that will consider your application provided there are fair reasons for the credit enquiries.

Ways to manage your credit file:

  • ✅ Get a free copy of your credit file from Veda, or we can get one for you.
  • ✅ Sign up for Credit File Alerts using Equifax
  • ✅ Look at banks who do not credit score home loan applications

Our team regularly deals with these non-credit scoring lenders and can help find a deal that works for you, find out if you qualify with a free assessment.

Read More: What Positive Credit Reporting Means to Home Loans

11. Missing a phone bill

A bad credit history in the eyes of the banks involves small defaults, bankruptcies and judgements on your credit file – but did you know that missing a phone bill can also give you bad credit history?

Loan declined missed phone bill

Defaults on your credit file as small as $100 can cause the bank to reject, or decline your home loan.

As an example we’ve recently had a first home buyer who had a small phone bill that was sent to their old address, they moved and it was never paid. This first homeowner never received the bill and wasn’t notified of it being overdue because all the mail was going to the wrong address.

As a result, the phone company put a default on their credit file for the amount owing and the first homeowner didn’t become aware of this until they tried to apply for finance through their bank and got knocked back! Fortunately, they came to us, and we were able to help navigate around it and find a lender that would let them buy their dream home.

Phone Bill Default (telco default)Bank ABank BBank C
Under $100NoYes, if paid.Yes, if paid.
Under $500NoYes, if paid.Yes, if paid.
Over $1,000NoNoYes, if paid.


Ways to navigate a bad credit file

  • ✅ Get a free copy of your credit file from Veda, or we can get one for you.
  • ✅ Sign up for Credit File Alerts using Equifax
  • ✅ Look at banks who do not credit score home loan applications

Having a black mark on your credit file doesn’t necessarily mean it’s the end of the world and your loan may not get declined, but we can help you apply with the right lender for your situation to make sure you get your loan approved speak with our Bad Credit Experts and call us on 1300 088 065.

Read More: What happens if I have a bad credit history?

12. Late on a rent payment

While you wouldn’t think being late on your rent should affect your home loan application, some lenders will ask for 12 months rental history (or a tenancy ledger) which can detail your rental payments.

Loan declined missed payment

If you have missed a rental payment or were late for more than 1 rental payment over the past 12 months your bank might decline your pre-approval

Case Study: 1 Late Payment and 1 Declined Home Loan

For example, Sally and Tom have been renting for the past 3 years in a unit in Brisbane. They have been making their weekly rental payments on time perfectly for the past few years, but in January they went on a holiday and had all their money sitting in their savings account – and not the transaction account where the rental payments come from.


Their weekly rental came out on Monday from their transaction account where there wasn’t enough money, and caused their rental to go into default and an overdrawn fee to be charged.


Their bank declined their pre-approval because of poor rental conduct, but fortunately, our team at Hunter Galloway were able to show there was enough money in their savings account and because they were on holidays were able to get their decline overturned!

Ways to navigate late rental payments

  • ✅ Can you show it was a timing issue? Maybe there were delays in transferring between your accounts?
  • ✅ Was it an administrative error? Can you show direct debits were not set up correctly?
  • ✅ Did you have money in other accounts? If you can explain it was in the wrong place it might be ok.

Missing a rental payment doesn’t mean the end of the world and your home loan should not get declined, we can help you apply with the right lender for your situation to make sure your home loan gets approved so speak with our Home Loan Experts or call us on 1300 088 065.

Read More: Get a Free Assessment with our Mortgage Broking Experts

13. Spending habits

When you apply for a home loan nearly all banks will want to see your last 3 months (some banks even want to see 4 months!!?) day to day transaction account statements.

As crazy as it might sound if you spend too much at Zara, Dan Murphy’s or even Sportsbet on the weekend it could affect your home loan application.

Loan declined spending habits

This is because the bank will look at your day to day spending habits from the past month, look at these costs and annualise them to determine what it costs you to live each year…

…And if you had a particularly expensive month, it could reduce how much the bank is willing to lend you!

Case Study: Tara’s bank declined her loan because of a recent holiday?!

For example, Tara has recently come back from a trip to Sydney and wants to apply for a pre approval through her bank Suncorp. They ask to see her last 4 months day to day statements, where they go through her accounts line by line and work out she had on average spent $2,000 per month in entertainment expenses (food, drinks, movies, pub, concerts).


On top of this she spends $1,532 in other living expenses like health care, transportation and internet costs (not including rent). In total her monthly living expenses are $3,532 and Tara’s after tax income is $4,000 which only leaves $468 that could go towards future mortgage repayments.


Suncorp bank declined her loan because on paper she did not have enough income to prove propensity to make her mortgage repayments.


Our Credit Experts at Hunter Galloway were able to review Tara’s bank statements and show that her expenses from the past month were abnormally high, as she was on holidays – they included several once off expenses like Aeroplane tickets, taxis to and from the airport, eating out at restaurants and hotel costs – and were able to get her home loan approved.

Ways to explain your living expenses

  • ✅ Have you gone on holidays in the past 3-4 months?
  • ✅ Did you have any large one-off expenses like aeroplane tickets?
  • ✅ Check your statements are consistent with the information given.

High living expenses don’t mean the end of the world and your home loan should not get declined, we can help you apply with the right lender for your situation to make sure your home loan gets approved so speak with our Home Loan Experts or call us on 1300 088 065.

Read More: 16 [easy] tips to Find the Best Mortgage Broker in Brisbane

14. Decreases in income

At the time that you’re pre-approval was given, you could have been working more hours or received a bonus which the bank used to determine the total amount they could lend you.

This is fairly common for casual employees, whose hours fluctuate week by week and since your home loan was pre-approved, your hours might have dropped and as such your income has also decreased… causing the bank to decline your home loan.

Loan declined decreased income

Different banks substantiate your income in different ways, and if there is a fair reason for your reduction in income they might consider using the previous amount provided you give some extra documentation.


Type of IncomeBank ABank BBank C
Casual IncomeWeekly pay x 46 WeeksWeekly pay x 52 WeeksUsing Year to Date Figure from payslip


For example, Matthew works as a barista and is employed casually. His hours can decrease when there are public holidays like Easter, he gave his bank this payslip and his loan was declined because they thought his income had decreased.


Different banks assess casual income differently:

  • 🏦 Bank A, assessed his annual income as $500 x 46 = $23,000
  • 🏦 Bank B, assessed his income as $500 x 52 = $26,000
  • 🏦 Bank C, assessed his income based on his year to date payslip figure which annualised to $30,000 because he ordinarily works much more hours during a regular week

To use this income we will need:

  • ✅ Your 2 Most Recent Payslips
  • ✅ Your Most Recent Years Group Certificate / PAYG Assessment Notice
  • ✅ If possible, your most recent years tax return.

A temporary decrease in income doesn’t mean the end of the world and your home loan should not get declined, we can help you apply with the right lender for your situation to make sure your home loan gets approved so speak with our Home Loan Experts or call us on 1300 088 065.

Read More: Loans for people with Unique Employment 

15. Working for family

Working for a family member can have its perks, but it can be a really big pain when you are applying for a home loan and a common reason to have your loan declined after pre-approval.

Working for a family member can include anyone from your parents, spouse, de-facto, grandparents, brothers, sisters, children, brother-in-law, sister-in-law or any legally appointed guardian… so it’s fairly broad!

Loan declined working for family

16. The type of rental you receive

Each bank has its own way of reviewing the rental income you receive from investment properties, normally they will take 80% of the total rent you will receive but there are cases where they will use a lower figure…

Case Study: AirBNB Rental Income on Investment Property

For example, if you rent out a spare bedroom or use AirBNB Rental Income some banks will only use 50-60% of the gross rental income because it is considered short-term (riskier) than an ordinary rental investment property.


Other banks will accept the rental income detailed on the property valuation.


At Hunter Galloway we work with some banks that will allow you to use 80% of the total rental income you get from short-term rental like AirBNB, and Stayz provided you can give your most recent tax return showing the total income and expenses from the rental.

Call us on 1300 088 065 or complete our online enquiry form to see if the type of rental income you receive can help you qualify for a loan, and turn around your home loan decline.

Loan declined rental income
Type of Rental IncomeBank ABank BBank C
Standard Rental80% of Gross Rental80% of Gross Rental75% of Gross Rental
Student Accommodation60% of Gross Rental60% of Gross Rental60% of Gross Rental
DHA LeaseNo100% of Net Rental75% of Gross Rental
Serviced ApartmentNo60% of Gross Rental60% of Gross Rental
Holiday RentalNo80% of Gross Rental60% of Gross Rental
Short Term Rental (e.g. AirBNB, Stayz, Guest-housing)No80% of Gross Rental50% of Gross Rental
Commercial Rental70% of Gross Rental70% of Gross Rental70% of Gross Rental


To use this income we will need:

  • ✅ Your most recent Airbnb statement showing receipt of rental within the last 120 days.
  • ✅ Your 2 recent years PAYG group certificate
  • ✅ Most 2 recent years tax return + ATO Notice of Assessment

Read More: Complete Online Enquiry to review your rental income and see if you qualify

17. Used your deposit

Home loan pre-approvals can last up to 6 months, so the amount of deposit you had in January might have changed by the time you find a home in June… but what can you do if you used your deposit?

Loan declined used deposit

The options include:

  • 👌 Look for a lender that will lend you a higher loan amount, and require less deposit (we have lenders that can do up to 95% LVR loans, and 100% LVR if you have a guarantor)
  • 👌 Asking your parents or a relative to gift the deposit amount you are short
  • 👌 Looking at a brand new property so you qualify for the $15,000 Queensland first Homeowners grant
  • 👌 Consider buying a cheaper property to reduce how much deposit is needed

Not having enough deposit doesn’t mean the end of the world and your home loan should not get declined, we can help you apply with the right lender for your situation to make sure your home loan gets approved so speak with our Home Loan Experts or call us on 1300 088 065.

Read More: How much is the First Homeowners Grant

18. Buying in a high-density area

A high-density unit complex is usually seen by the banks as a unit or apartment complex with more than 50 units, and over 4 stories high and usually mean the banks will want a higher deposit and impose other restrictions around apartment size.

Other banks will define high-density areas based on the specific postcode, for example, Brisbane CBD postcode 4000 is considered a high-density area.

Loan declined high density

In other cases, some banks will be ok with lending on apartments but have restrictions based on:

  • 🏘The suburb or postcode where the unit is located, sometimes with restrictions based on high density or inner-city locations.
  • 🏘 How many floors the block of apartments has, sometimes with restrictions when it is higher than 4 stories.
  • 🏘 The total floor area inside the apartment, with restrictions if it is less than 40 square metres.
  • 🏘 If the bank already has too much lending in the building you are wanting to buy in.

Some banks will allow you to borrow up to 95% of the purchase price on a high-density apartment, to see if you qualify to call us on 1300 088 065 or complete our online enquiry form.

Type of PropertyBank ABank BBank C

High Density

(MaxImum LVR)

Other RestrictionsMinimum apartment size 1 bedroom 50 sqm and 2 bedrooms 60 sqmMaximum LVR depends on factors like borrower type, loan amount, property location and valuation reportHas to be an owner occupied purchase (i.e. you will live there).


To buy a unit in a high-density area

  • ✅ Ask your mortgage broker to check your bank will accept the property
  • ✅ Arrange a bank valuation to see there are no adverse comments on the unit
  • ✅ Double check the internal floor area of the apartment

Read More: How to find the best home loan in Brisbane 

19. Saving history

f you are borrowing with a lower deposit, the banks want to get an understanding of your savings history – they look for something called genuine savings, which is just another way of asking to see funds that you have saved yourself.

In other words, it is savings that have been sitting in your account for 3 or more months and in recent times banks want to see at least 5% of the purchase price as genuine savings.

Loan declined saving history

This does depend on the lender because there are cases where you can be borrowing with less than a 10% deposit and not need to show genuine savings provided you meet some criteria.

The following are considered substitutes for genuine savings:

  • ☑️ Equity held in property
  • ☑️ Rental History as demonstrated over a 6 month period
  • ☑️ Term Deposits
  • ☑️ Shares held

Each bank has a unique policy on genuine savings and it usually depends on how much deposit you are putting down for the property.

Not having genuine savings doesn’t mean the end of the world and your home loan should not get declined, we can help you apply with the right lender for your situation to make sure your home loan gets approved so speak with our Home Loan Experts or call us on 1300 088 065.

Type of savingsBank ABank BBank C
Genuine SavingsOver 85% LVROver 90% LVROver 80% LVR

To use Rental History to demonstrate genuine savings you need a letter from the real estate agent confirming:

  • ✅ Full names of tenants
  • ✅ Address of the property you tenanted
  • ✅ Date you started renting the property
  • ✅ Amount of rent paid per week, month or fortnight
  • ✅ Confirmation that you have not missed any payments

Read More: Arrange a time to meet with one of our team

20. Purchasing a property in a flood zone

Especially if you are buying a house in Brisbane, there are restrictions to properties located in flood zones where there is a greater than a 1 in 100 chance of flood.

This is sometimes referred to the Q100 flood level, which is a gauge on the height of the water in previous floods and for some lenders, if a property is located in a flood-prone area they will simply not lend against it.

Loan declined flood zone

You can see if your property is in the flood zone by checking the Flood Awareness Map on the Brisbane City Council Website, or if it is in one of these postcodes:

Flood Prone Postcodes in Brisbane
Suburbs Affected by Flooding in 2011
  • 4133
  • 4207
  • 4285
  • 4700
  • 4701
  • 4702
  • 4799
  • 4800
  • 4801
  • 4802
  • 4803
  • 4804
  • 4805
  • Albion
  • Auchenflower
  • Balmoral
  • Bellbowrie
  • Brisbane City
  • Bulimba
  • Chapel Hill
  • Chelmer
  • East Brisbane
  • Greenslopes
  • Hamilton
  • Hawthorne
  • Indooroopilly
  • Kelvin Grove
  • Kenmore
  • Milton
  • New Farm
  • Newstead
  • Norman Park
  • Oxley
  • Paddington
  • South Brisbane
  • Toowong
  • West End
  • Windsor
  • Woolloongabba
  • Yeerongpilly
  • Yeronga

But, there is hope if you are purchasing a house in a flood zone!

Some lenders will lend against a property in a flood-prone area provided you have:

  • 🌊 Comprehensive flood cover insurance
  • 🌊 A satisfactory valuation or survey report

They will also factor in other items like the loan amount, property type, location and loan structure.

Buying a property in a flood zone doesn’t mean the end of the world and your home loan should not get declined, we can help you apply with the right lender for your situation to make sure your home loan gets approved so speak with our Home Loan Experts or call us on 1300 088 065.

Read More: Research if your home has gone swimming (i.e. flooded in Brisbane)

21. Purchasing a property with renovation issues

The headline saying the worst house on the best street, or the renovator’s delight might seem like a great idea…

…Until the bank declines your loan after your pre-approval!

Loan declined renovation issues

What do you do now?

The banks generally do not like houses that are incomplete or unlovable.

Missing kitchens and bathrooms with holes in the floor are a pretty firm decline from most banks unless you have more than a 20% deposit.

There can be options depending on how substantial the renovation issues are, finding out:

  • 🚧 How bad is the house, is it structurally sound?
  • 🚧 Are there just cosmetic issues?
  • 🚧 Will it cost less than $50,000 to fix?
  • 🚧 Can you provide quotes, or a building contract to correct?
  • 🚧 Are you going to be able to live in the house while you renovate?

Buying a property with renovation issues doesn’t mean the end of the world and your home loan should not get declined, we can help you apply with the right lender for your situation to make sure your home loan gets approved so speak with our Home Loan Experts or call us on 1300 088 065.

Read More: How does Construction Financing Work?

22.Changes in credit criteria

Bank credit policy changes all the time, and with the Banking Royal Commission, their credit criteria policy is changing even more often.

So what happens if you applied for your pre-approval in February, and then when you find a property in March the credit criteria has changed…?

Your loan might be declined after it has been pre-approved…

What can you do to help navigate changes your bank’s credit criteria?

Make sure you are working with the best mortgage broker in Brisbane.

Ask your mortgage broker lots of questions before choosing to go ahead with them including:

  • ✅ How many years experience do you have as a mortgage broker in Brisbane? 
  • ✅ What did you do before you were a mortgage broker?
  • ✅ Do you own any property yourself? Have you got a home loan yourself? 
  • ✅ How many properties do you own in Brisbane? 
  • ✅ What home loan customers do you typically help?
  • ✅ How many home loans do you do each week? 
  • ✅ What is the average home loan size you provide? 

Read More: Home Loan Declined by a Bank? 

23. Failing the Banks Credit Score

Lots of banks use credit score to understand your credit history, instead of manually going through your past transactions.

Loan declined credit score

Your credit score is calculated using a number of factors, including:

  • ⛔️ How many credit enquiries you’ve had in the past 3-6 months
  • ⛔️ The types of finance you have applied for in the past 12 months
  • ⛔️ If you have any overdue or defaulted debts in the past 5 years
  • ⛔️ If you have been bankrupt in the past 10 years
  • ⛔️ If you have had any late payments on your electricity, gas or mobile phone service
  • ⛔️ If you have had any interest free, or afterPay sale finance
  • ⛔️ If you have had any court writs or judgments


Case Study: First Home Buyer got his loan declined because he failed the banks credit score test

For example, Tyrone was applying for a home loan through his bank but he had applied for a personal loan, interest-free loan and 2 credit cards in the past 4 months and was recently late on his electricity because he had been away for work.


His bank declined his loan after his original pre-approval because he had a bad credit score.


Our team at Hunter Galloway were able to find Tyrone a bank that didn’t credit score home loan applicants, we explained to the bank that Tyrone had been travelling which is why he was late on his electricity bill and he didn’t actually proceed with the personal loan.


Failing a banks credit score criteria doesn’t mean the end of the world and your home loan should not get declined, we can help you apply with the right lender for your situation to make sure your home loan gets approved so speak with our Home Loan Experts or call us on 1300 088 065.

24. An unreliable pre-approval

Not all banks are the same when it comes to assessing a pre-approval home loan, also known as a conditional approval, indicative approval, approval in principle or home seeker depending on the bank you use.

In most cases a pre-approval is just an indication that the bank is ok to consider approving your loan, they may just complete a credit check and not check any of or your documents and wait until you lodge a full mortgage application to do this.

A full mortgage application is done when you find a property and means the lenders will complete the entire assessment of your loan, they will verify your payslips, bank statements, your income information, savings information and any liabilities you have to be 100% sure they can lend you the money.

Unreliable pre approval

Having your loan declined after pre-approval doesn’t mean the end of the world, we can help you apply with the right lender for your situation to make sure your home loan gets approved so speak with our Home Loan Experts or call us on 1300 088 065.


25. The pre-approval expired

Bank pre-approvals are usually valid for between 90 to 180 days or 3 to 6 months. This is also referred to as the approval-in-principal period…

But what happens if you find a house after 6 months and 1 day?

It’s back to the drawing board, and you will need to give the bank brand new payslips and bank statements…

Different banks have different requirements at this stage, they can range from:

  • ✅ Confirming with the bank that your financial position has not changed over the past 90-180 days.

All the way to:

  • ✅ Giving the bank brand new supporting documents, payslips, bank statements and identification.

The downside is if your situation has changed the bank could possibly decline your loan even after it was pre-approved a few months back…

Having your loan declined after pre-approval doesn’t mean the end of the world, we can help you apply with the right lender for your situation to make sure your home loan gets approved so speak with our Home Loan Experts or call us on 1300 088 065.

26. Forgetting a few details

Applying for a home loan involves lots of different documents and pieces of information.

You also need to give details of any credit cards, transaction accounts and other information you have open… and forgetting details here and there can cause massive problems in the eyes of the banks.

Loan declined forgetting details

The banks will need to see three, to four months of your day to day transaction statements and if you forget to mention a credit card that has direct debits coming from your main account it can cause a big headache.

The banks consider this an undisclosed debt or liability.

…and with some banks, having undisclosed liabilities can mean an instant decline.

A common one we see if an interest-free credit card you might have gotten a few years ago from Harvey Normans, that you haven’t used for years and completely forgotten about.

So what can you do to make sure you don’t miss any debts? 

Your credit report will show you any credit enquiries you’ve done over the past 7 years and will help jolt your memory!

  • Get your mortgage broker to double check your day to day account statement 

 Payments from credit cards and AfterPay will generally be coming from your day to day account, your mortgage broker can run through this with you to double check there isn’t anything in there you might have accidentally forgotten about!

Having your loan declined after pre-approval doesn’t mean the end of the world, we can help you apply with the right lender for your situation to make sure your home loan gets approved so speak with our Home Loan Experts or call us on 1300 088 065.


27. Being too young… or too old

Although there are laws (check out the Discrimination Act) to make sure banks don’t discriminate because of your age, these days it is common for the lenders to ask for an exit strategy in paying off your home loan if you are over 45 years old.

Loan declined too young or old

In effect, these restrictions can limit your mortgage options because of your age.

While different banks have different policies, some common exit strategies for anyone aged over 45 years old is:

  • ✅ Moving to a smaller house and downsizing once you reach retirement age
  • ✅ Selling other investment properties, or shares.
  • ✅ Releasing funds from your superannuation to pay down the loan.
  • ✅ Recurring income received from your superannuation fund

Having your loan declined after pre-approval for being too young (or too old) doesn’t mean the end of the world, we can help you apply with the right lender for your situation to make sure your home loan gets approved so speak with our Home Loan Experts or call us on 1300 088 065.


Bonus: What happens after your home loan is approved?

So you’ve got your approval letter from the bank, you know you’re unconditionally good to go, and your purchase is around the corner. What do you do? What is the process from here?


What happens after approval

So you’ve got your approval letter from the bank, you know you’re unconditionally good to go, and your purchase is around the corner. What do you do? What is the process from here?

The 1st step is to sign your loan documents. This usually includes the mortgage document from the government, your loan contracts that have all your interest rates, general terms and conditions, your direct debits—all the awesome stuff to do with your home loan. If you do have a finance clause, you don’t need to sign the loan contracts to go unconditional on your Contract of Sale. You just need to give the approval letter that you get from your mortgage broker.

The 2nd step is to talk with your solicitor or conveyancer, as they usually have important documents for you to sign. Tell them you have signed your loan contracts and ask if there are any stamp duty concessions or first homeowner grant applications you need to make. All of this needs to happen before settlement.

Also, talk to your solicitor or conveyancer to ensure there are no further adjustments with the dollars and cents at settlement. If there are any searches pending with the solicitor, follow them up and make sure everything is in order.

The 3rd step is mail, power, and internet. In other words, get your utilities connected a few days before you move in. You don’t want to move into your new house and have no power for a few days. Things like internet can take weeks to get connected. So, now that your loan is approved, you have signed your loan contract, spoken to your solicitor, and know the day you are moving – get your utilities connected.

The 4th step is to arrange for pre-settlement inspection. Most first home buyers homebuyers forget this crucial step. Two or so days before settlement, you should go to the property to make sure it is still the same as when you originally saw it. For example, if there is now a hole in the wall or they have ripped out the dishwasher, then you have a few days to sort it out and even get your money refunded before settlement takes place. Unfortunately, once you settle, any issues become your problem.

The final step is to crack the champagne! Well, after you pick up the keys. Usually, around 3 pm on the day of settlement, your solicitor will call and tell you that the settlement has gone through, and you can collect your keys from the real estate agent. Congratulations, you are now a homeowner!

Next steps and settling your new home

Our team here at Hunter Galloway is here to help you buy a home in Brisbane. Nathan & Joshua Vecchio are Senior Mortgage brokers who specialise in making your home journey easy.

Mortgage broker brisbane

Unlike other mortgage brokers who are just one person operators, we have an entire team of experts to help make your home loan journey as simple as possible.

If you want to get started, please get in touch here and we can book a time that suits you – either a phone call information session or a face to face meeting (which doesn’t cost anything for you).

Further reading for Home Buyers…


Note: Information is current as at October 2022 and subject to change without any further notification. Any home loan application is subject to credit approval, and verification of all supporting documentation. Consider this article as general in its nature and not to be taken as advice.

Ready to take the next step toward buying? We’re happy to help. Schedule a call today with a Home Loan Expert from Hunter Galloway, the home of home buyers.


Why Choose Hunter Galloway As Your Mortgage Broker?

Mortgage Broker of the Year
in 2017, 2018 and 2019
The highest rated and most reviewed
Mortgage Broker in Brisbane on Google
One of the lowest rejection rates

across Mortgage Brokers in Australia

Approximately 40% of home loan applications were rejected in December 2018 based on a survey of 52,000 households completed by 'DigitalFinance Analytics DFA'. In 2017 to 2018 Hunter Galloway submitted 342 home loan applications and had 8 applications rejected, giving a 2.33% rejection rate.
We have direct access to 30+ banks
and lenders across Australia