What Can Hold Up a Home Loan Approval (and How to Avoid It)

Applying for a home loan can feel straightforward on the surface, but there are a number of common issues that can slow things down or cause unnecessary stress along the way.

The good news is that many delays are avoidable with the right preparation and guidance. Here are some of the most common factors that can hold up a home loan approval, and what you can do to stay ahead of them.

Incomplete or Inconsistent Information

One of the biggest causes of delays is missing or inconsistent information. Lenders rely on accurate documents to assess your application, including payslips, bank statements, and identification.

Making sure everything is up to date, clear, and consistent before submitting your application can save valuable time and reduce back-and-forth with the lender.

Recent Changes to Your Finances

Lenders don’t love surprises. Changes such as switching jobs, taking on new credit, or making large unexplained transactions can raise questions during the assessment process.

If something has changed recently, it doesn’t necessarily mean your application won’t be approved — but it does mean extra explanation may be required. Planning the timing of your application carefully can help avoid delays.

Spending Habits and Account Conduct

It’s not just about income. Lenders also look closely at how you manage your money.

Frequent use of Buy Now Pay Later services, gambling transactions, or accounts regularly dipping into overdraft can slow things down and impact how your application is viewed. Tidying up spending habits early can make a noticeable difference.

Applying for New Credit During the Process

Applying for a credit card, personal loan, or even increasing a limit while your home loan is being assessed can complicate things.

New credit can affect your borrowing capacity and often requires reassessment. It’s generally best to keep your finances steady until your loan has been formally approved.

Timing and Lender Turnaround Times

Approval timeframes can vary depending on lender workloads, public holidays, and peak buying periods.

Getting organised early, particularly around Christmas, Easter, or EOFY, can help avoid unnecessary delays and ensure you’re ready to move when the right property comes along.

How Preparation Makes a Difference

Many of these issues can be managed with the right planning. Having a clear picture of your finances, understanding what lenders look for, and getting advice early can help keep the process smooth and predictable.

A well-prepared application not only moves faster, it also gives you confidence when it’s time to make an offer.