A mortgage valuation survey is commissioned by the lender in order to establish whether the property being purchased will be adequate security for the amount of the loan.
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A mortgage valuation is quite brief consisting of only a few pages and therefore does not go into very much detail about the state of the property. It is not a substantive survey as such. The report will state the type of property it is ( e.g. semi-detached, mid terraced etc. ) and it will also comment on structural works that may have been undertaken, e.g. the removal of a chimney breast or a loft conversion. However, any comments will be very limited. The mortgage valuation inspection is brief and the main aim of the valuation is to value the property on behalf of the lender to ensure it reflects the loan amount.
The borrower pays for the mortgage valuation and is usually provided with a copy although some lenders do not release it.
Relying on a mortgage valuation without obtaining a more substantive survey would be suitable when buying a property that is in the process of being constructed or is a new build property. A property such as this would usually benefit from an insurance policy or Builders Warranty which covers structural defects. In all other circumstances it is advisable to obtain a Structural / Full Survey or a Home Buyer’s Report.
How is a Building Survey or a HomeBuyer Report different from a mortgage valuation survey?
You should obtain a full or structural survey when you are buying a property which is more than 100 years old and where the property has been substantially altered. The report will have a list of recommendations at the end of it and advice on how to remedy any defects. It is a lengthy, detailed report.
A HomeBuyer Report is recommended for properties which are less than 100 years and where the property has not had substantial alterations carried out.
It is very important to obtain a substantive survey before buying your property, as opposed to simply relying on a mortgage valuation survey, since it will highlight many matters that would not be apparent unless the property was inspected by a qualified surveyor. E. g. , matters such as damp, timber infestation, the quality of a loft extension or the condition of the flooring may well be overlooked by your average purchaser who perhaps takes only 30 minutes or so to view a property. Any substantial defects can lead to a negotiation of a reduction in the purchase price or in extreme cases, could deter the buyer from proceeding with the purchase altogether. In any event, a substantive survey should be carried out (where applicable) so the buyer can make an informed decision as to whether and on what basis to proceed with the purchase.
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