Mortgage Valuation Survey – What do they look for?
After writing a post the other day about whether it’s worth getting a mortgage I realised that I haven’t written a ‘mortgage tips’ post in a while, so here’s one for all you homebuyers and sellers out there. Today we’re asking the question, Mortgage Valuation Survey What do they look for?
In the UK we tend to deal with 3 different types of building surveys. The most expensive of these is the full structural buildings survey, the middle one – which we’ve written about in the past – is the Homebuyers report and the most basic and therefore the cheapest of the 3 is the mortgage valuation survey, otherwise known as a valuation for mortgage purposes. So what do they look for in a mortgage valuation survey?
What do they look for?
When we say ‘they’ we are really asking what does a building surveyor look for in a mortgage valuation survey. The simple answer to this question is not a lot, not a lot of substance anyway. When you make an application for a mortgage the mortgage lender usually wants to know the answer to 2 main questions:
Question 1 – Is the house worth the price you’re paying for it?
Question 2 – Is the house going to fall down any time soon?
These are the two questions a mortgage valuation survey is designed to try and answer, so let’s quickly look at each of these two questions in a bit more detail.
Is the house worth the price you are paying for it?
If you think about it from a mortgage lenders point of view they simply want to know that they aren’t lending someone £100,000 for a house that’s only worth £75,000, because if they ever have to repossess the house, they want to be sure they will get as much of their money back as possible. That’s the simplest way to explain it but there are other factors to take into consideration like loan to value (LTV) and even mortgage fraud but really they just want to know that the valuation you or the buyer has placed on the property is accurate. To do this they will look at things like the overall condition of the house, whether it has been modernised throughout the years or requires modernisation, whether the number of bedrooms declared is accurate considering building regulations, things like that. They will also be looking at comparable’s of similar houses that have recently sold in the area.
Is the house going to fall down anytime soon?
In this area basic mortgage valuations don’t dig all that deep when it comes to the structural areas of the house. A mortgage valuation survey will check for obvious sign of structural damage, damp, problems with the roof, problems with wiring etc. No carpets will be lifted and no readings will be taken but if any potential issues are spotted, don’t be surprised if the surveyor recommends that a more detailed report – a damp and timber report for example – be obtained by the mortgage company before approving the mortgage, if only to cover the surveyors back if nothing else.