Mortgage Valuation: What to Expect

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During the process of applying for a mortgage to buy a property, your lender will arrange for a surveyor to look at the property and give a formal valuation. This is done to ascertain the amount the lender is willing to offer and ensure that the property meets the criteria for a loan.

What does a mortgage valuation involve?

A lender’s valuation depends entirely on the property in question. It’s a broad survey that provides independent confirmation for the lender of the true value of the property, so it includes a check on prices of similar properties that have sold in the area.

The valuation also lets the lender know if there are any unconventional features or defects that might impact the property’s value. Remember, the lender is preparing to offer a large amount of money against this property, so they need to ensure it fits their criteria and comes at the right price.

Please be aware that the process of buying a house is different in Scotland, so some of the content in this article will not apply. Mortgage lenders in Scotland may rely on a valuation arranged by the vendor (the seller).

How does it work?

The lender will choose the surveyor to conduct the valuation, It usually takes place within two weeks. This valuation report is for the benefit of the lender, and it will often be only 2-3 pages long. It may be possible for you to see the report, but this will be at the lender’s discretion. If any serious issues were flagged, the lender will probably let you know.

This survey doesn’t go into huge detail and it will not give recommendations of maintenance or repairs that will be required. If you want this type of guidance, keep reading and you’ll learn about other types of survey you could have carried out.

Who pays for the lender’s mortgage valuation

The applicant (you) will be required to pay the valuation fee when you make your application. There are some lenders who don’t charge for the valuation, so be sure to carefully read your Key Facts Illustration to know what to expect.

Other types of survey

You may want to get maximum preparation for your property purchase by having a more in-depth understanding of the condition of your property. There are more detailed property surveys available to you, which can usually be carried out alongside your lender’s valuation. These come at varying levels of detail and with different types of recommendations, and they will cost you extra.

The two types of surveys you need to explore are as follows:

HomeBuyer Report – for conventional properties in reasonable condition, this should be sufficient. It will cost around £500 but could save you money in the long-term by identifying issues such as subsidence, structural problems or damp. You will get a report with recommendations for repairs and guidance on how much they will cost.

Building Survey – the most detailed report available, these comprehensive surveys cost upwards of £800 and offer a full breakdown of the structure and condition of the building. It goes further than a HomeBuyer Report to flag both external and internal problems, including under floorboards, behind walls and in the attic eaves. These are suggested for older properties or those in poor condition, this will give you an in-depth analysis of the property’s condition.

If a survey flags any significant issues, it could have an impact on the property’s value. At this point, you will have the option to approach the vendor with the issues identified in order to negotiate the price in line with the issues identified.

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