Buyers are getting an unwelcome surprise when home loans they thought they had secured fall through just when they need them.

Geoff Barnett, national manager of real estate agency Century 21 in New Zealand, said there were an increasing number of deals not going through because the buyer could not get a loan.

He said, in some cases, buyers thought they were pre-approved and sorted.

"When it gets down to the nitty gritty of a sale, more lenders are then insisting on getting the likes of valuations done and giving much closer scrutiny to mortgage serviceability. It's often when banks are finalising their lending assessment on a specific property, that some buyers are then told they no longer meet the lending criteria," he said.

"It's heart-breaking for buyers, vendors and agents alike when finance falls over but given some international uncertainty and a levelling New Zealand real estate market, heightened caution by our banks and other lenders is totally understandable."

Banks have toughened their lending criteria over recent months.

Reserve Bank loan-to-value rules also require most owner-occupiers to have a deposit of at least 20 per cent, and investors 40 per cent.

Mortgage adviser Bruce Patten, of Loan Market, said finance was more of a problem than it had been for some buyers.

But he said there were a range of reasons for that.

"People speak to their bank or their adviser and are told, 'hey, we don't have funding at the moment over 80 per cent however you meet all the criteria, so when you find something let me know and we will get it sorted with a lender that does have funds'.

"When the time rolls around, turns out the information given at the time wasn't 100 per cent accurate and because they were not actually approved they have issues."

He said valuations, which were required when a borrower had a deposit of less than 20 per cent, could also be an issue.

If people were offering more than the market value of a property, the valuation could make that clear and a bank would be unwilling to lend.

"The other issues that causes more problems than anything is the fact that disclosure of unpermitted work is so much greater than in the past and there is a lot of it out there.

"People do work especially involving plumbing and electrical work, but they don't get it signed off. This creates an issue for insurers and in turn banks, and sometimes the bank wont accept the property as security."

New Zealand Bankers' Association chief executive Karen Scott-Howman said banks would take a range of factors into account when assessing applications.

"Banks are particularly interested in the borrower's ability to repay the loan, and the security provided for the loan. People seeking home loans need to be up front with the bank about their personal circumstances, such as existing financial obligations and outgoings," she said.

"Banks are very clear to customers when offering them a loan, and the conditions of the loan. As responsible lenders, banks ensure that borrowers understand what they are signing up to.

"Anyone buying a house should confirm they have finance in place before settling the deal. Usually the buyer's lawyer can assist with this process. "