When you apply for a home loan, the bank reviews your recent bank statements, usually the last three to six months. If they show regular spending on eating out, drinking or shopping, the lender sees a risk that you can't comfortably meet repayments and may reduce what it will lend or decline the application.

In this short video, McKern financial adviser Shahin Tehrani explains why a promise to cut back isn't enough. Lenders want to see the new habits in your statements, so it pays to tidy up your spending well before you apply.

General information only, not personal advice.