What is a mortgage survey?
When buying a property with a mortgage, most providers will require that you undertake a mortgage valuation survey before lending is approved. The sole aim of this survey is to satisfy the lender that the property you are purchasing has enough value to cover the amount they are lending you.
The surveyor will briefly inspect the property (usually lasting less than 20 minutes) and will collate their findings with information about local, comparable properties. Sometimes a reinstatement value is also calculated which is later used as part of your building insurance.
Whose benefit is the valuation for?
A mortgage valuation is for the benefit of the mortgage lender and in some cases the homebuyer may not even receive a copy of the report. It is to help the mortgage provider make an informed decision before agreeing to lend funds.
The report is concise and will only highlight major, obvious defects, which could have a significant effect of the property value which could therefore affect it as security for the proposed loan.
How can I make a more informed decision?
To make a fully informed decision before buying a property, we highly recommend that you commission an independent RICS home survey. These come is varying levels and will either provide information about the property’s condition, value or both. Shockingly, only 20% of homebuyers undertake some form of independent survey before purchasing, despite it being the largest investment many people will make in their lifetimes.
If a prospective buyer is only interest in determining a property value, it is advisable to get an RICS Valuation Report, which will give a more substantiated market value. There are also three levels of home survey which will report on a property’s condition, these are: Level 1 RICS Condition Report, a Level 2 RICS HomeBuyer Report or a Level 3 RICS Building Survey. These reports may uncover expensive repairs needing to be carried out, that a mortgage valuation wouldn’t necessarily pick up.
About the author
surveybooker.com is a national online brokerage for RICS residential surveys. They aim to match you to the correct type of report and surveyor, to best help you make informed property decisions.
Disclaimer – This is a guest blog written by a third party. This blog does not represent the views or opinions of Right Surveyors Ltd or any of its affiliated companies.