Jo Raphael: Can you forego the barista coffee to get on the property ladder?

Banks will be taking a closer look at potential borrowers' spending habits. Photo / Getty Images

OPINION

Are you a fan of Uber Eats? Do you dabble in online shopping or love eating out in cafes, restaurants and bars?

Do you have an expensive shoe habit?

And are you also looking at borrowing money from the bank to buy a house?

If so, you should prepare to have your spending habits potentially scrutinised by your loan consultant.

Friday night drinks at the local pub or regular nail salon visits could be under the spotlight.

NZME reported this week that banks are clamping down on frivolous spending patterns when it comes to potential home loans.

Loans will take longer to process, and one mortgage adviser said it "has definitely got tougher. They are going through statements with a fine-tooth comb".

Under the Credit Contracts and Consumer Finance Act from December 1, banks are required to actively review information provided in more detail.

If your lifestyle choices are not quite in line with your income, you can expect to be red-flagged.

This could make some people self-conscious about the fact they may frequent the same café every day or regularly eat out.

Although this seems invasive and intrusive, in my opinion it can be good to get a different perspective on your finances.

With fresh eyes looking at your bank statements, this is a good chance to have a financial health check.

If you really want to secure a home loan, tighten your belt.

Can you live without takeaways or a barista-made coffee every day?

Will you be prepared to forego beer or wine and opt for water? Can you manage to drink instant coffee or ease up on the pies in order to clean up your bank statements?

I must admit, if my spending habits were picked over in order to secure a home loan today, I'm not sure I would pass muster.

Those little swipes of the plastic here and there may not seem like a big deal but over time they add up _ and banks will notice.

Borrowing money is not an automatic right, and banks need to satisfy themselves that the people they loan money to have the ability to repay it.

So if you can lay your cards on the table and stand for having your daily coffee purchases scrutinised, then it's worth it to be able to get your foot on the property ladder.