When the Bank Said No, We Found a Path to Yes

So, your bank declined your mortgage application? Definitely don't throw in the towel just yet. Getting a No definitely doesn't mean your homeownership dreams are over. In fact, it's a super common hurdle, and it's exactly where a good mortgage broker shines.

One of the most valuable things mortgage brokers offer is the ability to turn a decline into a successful approval — all thanks to our in-depth understanding of lender policies, knowing exactly which banks to approach, and presenting a deal the right way.

Today, I thought I’d share a real (but anonymous) case that shows exactly how this can work…

THE SITUATION: DECLINED BY THEIR OWN BANK

We were approached by a couple — let’s call them Sarah and James. They’d been with their bank for years, had stable incomes, and were looking to buy their first home.

They applied directly to the bank, expecting things to go smoothly. But instead, they received a decline letter. The reason?

“Living expenses too high. Application does not meet affordability criteria.”

They were confused and deflated — how the heck could they be earning decent money, saving regularly, and still get turned down?

WHAT WE DID DIFFERENTLY

Our first step with Sarah and James was to thoroughly examine their economic picture. We meticulously dig into every detail — something banks frequently overlook. This was informed by my many years of experience understanding what different banks and lenders are looking for.

Here’s what we did:

1. REASSESSED THEIR SPENDING AND INCOME

The bank had used a default spending benchmark that didn’t reflect their actual habits. When we reviewed their last 3 months of bank statements and presented a more realistic (and detailed) picture of where their money really went — far more favourable than the automated model used by the bank.

When reviewing their last 3 months of bank statements, we identified that their household expenses were lower than bank default expenses, due to a number of factors (including, for example, a lower grocery bill compared to other families of the same size due having access to food from a family farm, and internet and phone costs that were covered an employer due to Sarah working from home).

2. REASSESSED THEIR INCOME

After some digging, we discovered that the lender who declined the application hadn’t factored all the income the client’s received. Their bank had only used a base hourly rate, and didn’t count the client’s history of overtime which amounted to an average of 5 additional hours each week. The client could easily evidence this history by providing two years of income summaries from IRD. Without that income included, it really disadvantaged the client.

3. EXPLAINED TEMPORARY OR ONE-OFF TRANSACTIONS

The couple had recently taken a short trip and helped family with a one-off gift — both flagged by the bank as “ongoing costs.”
We included a cover letter clarifying these were not recurring expenses.

4. ADJUSTED THE STRUCTURE TO FIT THE GOAL

Rather than pushing for the full amount upfront, we suggested a stepped approach, using a slightly lower purchase price and gradually building equity. We also split the loan structure to create repayment flexibility.

5. TARGETED THE RIGHT LENDER

Instead of going back to the same bank, we targeted a lender known for:

• Being more flexible for first home buyers

• Offering quick turnaround, with human assessors!

We submitted the mortgage application with a clear story, supporting evidence, and proactive answers to likely questions.

THE RESULT: APPROVED IN 3 DAYS!

Not only was the mortgage approved, but the couple received favourable terms, a cash contribution, and a better rate than what their original bank had offered!

Best of all — they now had a clear plan to grow their equity and re-visit options in 18–24 months, including mortgage early repayments and adding offset features.

THE TAKEAWAY HERE?

Getting declined by a bank isn’t the end of the road — and it doesn’t mean you can’t get finance.
It may just mean the lender you approached (even if it’s “your bank”) isn’t the right fit for your situation.

Here’s what working with a mortgage broker like us brings to the table:

• In-depth knowledge of multiple bank policies and non-bank options

• The ability to present your story properly, not just tick boxes

• Creative mortgage structuring advice to improve your chances

• Advocacy — we work for you, not the bank!
  
  

If you've had a mortgage declined, or you're worried about whether you'll qualify — don’t give up. We’ve helped countless clients turn a No into a Yes by taking a smarter, more strategic approach. Let’s talk about how we can do the same for you - contact us today!

Our blog is not intended to be taken as personal tax or financial advice
and is for informational purposes only.
Before acting on this information, contact WealthHealth mortgage brokers
to ensure it is suitable for your circumstances.