How to Improve Your Financial Position Before Applying for Pre-Approval
If you’re thinking about buying your first home, pre-approval is often one of the first steps people talk about. But before you apply, there’s something just as important — making sure your financial position is as strong as possible.
Pre-approval isn’t just about income. Lenders look at the full picture: how you manage money, how consistent your finances are, and how much risk you present as a borrower. Improving these areas ahead of time can make the pre-approval process smoother and improve your options.
Here are some practical, first-home-buyer-friendly ways to improve your financial position before applying for pre-approval.
Reduce Unnecessary Debt Where Possible
One of the biggest factors lenders assess is your existing debt. Credit cards, personal loans, car finance, and buy-now-pay-later accounts can all impact how much you’re able to borrow.
Reducing or closing unused credit facilities can improve your borrowing position. Even if you don’t carry a balance, available credit limits can still be factored into lending assessments.
Tidying up debts before applying can make a noticeable difference.
Demonstrate Consistent Income
Lenders value stability. Consistent income over time helps demonstrate that you can meet repayments reliably.
If you’re employed, staying in the same role or industry where possible can help. If you’re self-employed or earn variable income, having up-to-date records and clear documentation becomes even more important.
The clearer and more consistent your income appears, the easier it is for a lender to assess.
Review and Control Your Living Expenses
Your spending habits matter just as much as your income. Lenders review bank statements to understand how you manage everyday expenses.
Before applying, it’s worth reviewing discretionary spending and identifying areas you can tighten temporarily. This doesn’t mean living uncomfortably — it means showing you can manage your finances responsibly.
A period of controlled, consistent spending can strengthen your overall position.
Build and Maintain Genuine Savings
Genuine savings demonstrate discipline and financial responsibility. Regular savings over time are often viewed more favourably than one-off lump sums.
Maintaining consistent savings patterns before pre-approval can help show lenders that you’re capable of managing ongoing repayments in addition to other expenses.
Keeping savings untouched where possible also helps demonstrate stability.
Avoid Taking on New Credit Before Applying
Applying for new credit cards, loans, or buy-now-pay-later accounts shortly before pre-approval can raise red flags.
New credit enquiries can impact your assessment and reduce borrowing power. If you’re planning to apply for pre-approval soon, it’s generally best to avoid taking on new credit unless absolutely necessary.
Keep Your Financial Behaviour Steady
Once you start preparing for pre-approval, consistency becomes important.
Large unexplained transactions, irregular transfers, or sudden changes in spending patterns can prompt additional questions from lenders.
Keeping your financial behaviour steady and predictable helps reduce friction during the assessment process.
Check That Your Accounts Are Well Presented
Your bank statements tell a story. Overdrawn accounts, missed payments, or frequent dishonour fees can weaken your application.
Ensuring accounts are in good order, with regular income deposits and minimal negative events, helps present a stronger overall picture.
Understand Your Borrowing Comfort Zone
Pre-approval isn’t just about how much a lender will approve — it’s also about what feels comfortable for you.
Understanding a realistic repayment level based on your lifestyle helps avoid overcommitting and positions you as a more responsible borrower.
This clarity is valuable when discussing options during the pre-approval process.
Get Guidance Before You Apply
Improving your financial position doesn’t have to be guesswork. Knowing which areas matter most — and which don’t — can save time and stress.
Chase Douglas has extensive experience in mortgage lending and works closely with first-home buyers to help them strengthen their financial position before applying for pre-approval.
From reviewing income and expenses to identifying simple improvements that can make a real difference, Chase helps ensure you’re well prepared before approaching a lender.
Set Yourself Up for a Strong Pre-Approval
Preparing your finances before applying for pre-approval can improve your confidence, your options, and your overall experience as a first-home buyer.
If you’re thinking about buying your first home and want to make sure you’re putting your best foot forward, now is the perfect time to
talk to Chase.
With the right preparation and guidance, pre-approval becomes a stepping stone — not a stumbling block — on your path to home ownership.
