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How to Compete in a Seller’s Market
April 9, 2021
How To Better Manage Your Finances Before Buying a Home
April 23, 2021

Things to Avoid After Getting Pre-Approved

One of the most important steps of the home buying process is getting pre-approved for finance early on.

Getting pre-approved gives you the confidence that if you put in an offer on a home, you’re going to be able to secure the loan to make the transaction happen. It also gives you a very clear understanding of just how much you can spend based on your income, expenses, savings and personal situation.

However, once you’ve received your pre-approval from a lender, there are still several things you need to consider. A pre-approval is not a guarantee that you will get finance from a lender; it is more of an indication that you will.

If your circumstances change, you will need to let your lender know. There are various things that could happen that might require you to go back to the lender and seek another pre-approval.

Changing Jobs

One of the most common things to happen to borrowers is a change in employment. Sometimes changing jobs is unavoidable, and in many circumstances, it can be a good thing. However, lenders like to see that you have steady employment and regular income to service your debts, and changing jobs can be a red flag.

If you’re staying within the same industry in a similar role, this might not be a problem. However, it is important you try to ensure you’re in a secure employment situation before you consider applying for a loan.

Missing Credit Card Payments and Bills

Just because you’ve been pre-approved, it doesn’t mean that you can get lax with your finances.

It’s vital that you continue to pay your bills on time and make credit card payments. This is a reflection of how you manage money, and if you start making payments late, that is a red flag to a lender.

It also impacts your credit score, and this is something that will be assessed by a lender.

Further Credit

While you’re waiting to find a home you want to purchase, it’s a good idea to avoid adding to your debts where possible, by not taking on any other loans or expanding lines of credit.

Even something as simple as a car loan will have a negative impact on your ability to service a home loan, and it could be significant. More debt will also alter your debt-to-income ratio, which is something that many lenders take into consideration.

Don’t Stop Saving

Lenders like to see that you have a degree of financial stability and that you can manage money.

If you’ve been saving consistently, don’t stop doing so just because you’ve been pre-approved. It is important that you continue to save and manage your money well.

Similarly, you don’t want to spend the savings that you do have. Lenders like to see that you’ve accumulated genuine savings and that they’ve been sitting in a bank account for several months.

For that reason, even if you’re moving money around, a lender might ask you to explain what’s going on. The worst-case scenario would be being required to go through the entire process again.


If you or any friends or family would like a purchase a home or investment property , get in touch with us asap to arrange a pre-approval!

Please give me a call on 0411 216 849 or book an appointment.

PS  This article is prepared based on general information. It does not take into account individual financial or property objectives or needs and is not financial product or investment advice.