When you apply for a loan, lenders ask you to list your living expenses and then check them against your recent bank statements, usually the last three months. If your statements show you're spending more than you've declared, or more than you earn, that raises alarm bells and can reduce what you can borrow or lead to a decline.

In this video, McKern mortgage broker Mark Jones shares a real example: a client who declared $6,000 a month in expenses but whose statements showed far more, because family had been visiting and they'd been eating out a lot. Rather than apply at the wrong time, they waited a few months for his spending to return to normal and then got the loan. If your recent statements aren't typical, talk to your broker about timing.

In this video

0:00 How lenders check your living expenses

0:56 A client whose statements didn't match

1:54 Does paying cash vs card make a difference?

General information only, not personal advice.