When you decide to buy a property, chances are you’ll need to get a mortgage – very few among us are able to buy a dream home without striking a deal with a mortgage lender first. One of the mortgage lender’s requirements is (most likely) that there will need to be a mortgage valuation done. This is a quick survey of the home to gauge its value, which will help the lender decide if approving the mortgage is indeed (from their perspective) a sound investment.
Whilst the mortgage lender may be satisfied with the mortgage valuation, such a report does not provide sufficient information for the serious buyer who wants to be sure their future home is in good condition. Here’s why a mortgage valuation survey is not enough when purchasing property
What’s a mortgage valuation?
A mortgage valuation is not really a survey – it’s important to understand that. Basically, a surveyor takes a quick look around and then, based on the market value, gives a rough estimate of the value of the property. It benefits only the mortgage lender; it’s part of their due diligence to make sure the investment (the loan they give you) is sound and reasonable.
The other options
You do have other options, and for buyers, this is highly recommended. Here are two of the most common ones:
- The homebuyer survey – This survey aims to uncover issues and potential problems that go beyond the obvious, and also includes an estimate of how much it may cost to fix potential issues.
- The structural survey – It’s the most expensive, but gives the most detailed report. Often separate experts are involved to evaluate specifics. It involves an in-depth inspection that goes far beyond the normal survey, as a qualified building surveyor from Chekes will tell you (drilling holes in the wall, for example, may be included).
Why the mortgage survey is not enough
The mortgage survey is not enough for many reasons. However, we mention only two here. First of all, the report mentions very few details and focuses on the market value – which is usually conservative. Secondly, there is no information about what possible problems may occur in the future, which leaves the buyer at a disadvantage.
There’s one caveat when it comes to choosing either the homebuyer’s survey or the structural survey, however – the actual valuation of the property is not included, although most surveyors will include this for a small extra fee. It’s definitely worth it; not only will the buyer be able to negotiate with the seller in case the asking price seems too high, he or she will also get a much better idea of what possible repair or refurbishment expenses lie in the future.