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What Is A Mortgage Valuation Survey

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  • 31-01-2019
What Is A Mortgage Valuation Survey

A mortgage valuation survey is an inevitable part of the home buying process. It may be commissioned by the lender, but it's often carried out in your expense. Often mistook for a building survey or a homebuyers survey, it's important to remember that this survey is done with the main objective of confirming the value of the property you are about to buy, and does not list any defects within the building.

Remember the surveyor is working for your mortgage company (the lender) and not you. The other thing you should understand is that the survey is very specific to the property you are looking to buy; the mortgage surveyor will look at a range of factors that can affect the value of the house at that time and in the future, including: 

  • the value of similar houses that are sold within one year
  • social amenities
  • location and proximity to facilities such as schools, hospitals etc

The mortgage surveyor will also determine the value of the house by looking at the age of the house, its design and model among other things. 

When the valuation is complete, the surveyor will let the lender know if any significant defects will need immediate attention. The mortgage valuation process differs from one country or location to another. Therefore, if it is your first time to buy a house using a mortgage or you don't understand how this process goes, seeking help from a professional or even friends is advisable.

consulting a property surveyor

Does a Mortgage Valuation report any defects?

The main objective of this survey is to determine the valuation of the property you are about to buy. Therefore, it is not wise to rely on this valuation to report any defects. If the mortgage surveyor needs another survey of the property, they will inform your lender to arrange for another surveyor. 

How much does a Mortgage Valuation cost?

The value of this valuation varies depending on a number of factors, including the type of mortgage you are applying for. The valuation is also affected by the mortgage product, in which some mortgage valuations are included for free with no extra cost to the buyer. You should be very cautious when it comes to the mortgage valuation cost inclusion or exclusion from your mortgage product. In most cases where the mortgage valuation costs are included, the mortgage interest rates are unfavourable and quite steep. Remember to check this before agreeing to any of these costs.