Mortgage valuations are standard procedure when buying a property. As a buyer, there are some confusions regarding mortgage valuations. This article aims to provide clarity to the confusions.
What is mortgage valuation?
Mortgage valuation is a standard procedure for lenders. It is a type of home inspection. It confirms the value of the property, and informs you of the costs involved in buying it. While the majority of mortgage valuations is done for lenders, there are cases where buyers choose to have one for their own reasons.
When you apply for a mortgage, your lender will want to know that you can afford the property by running a valuation on it. A valuation is an estimate of what your property is worth on today’s market compared to what it was worth at the time of purchase.
A mortgage valuation helps lenders gauge whether or not they will be able to let you borrow enough money to pay for your home loan, as well as how much risk they are taking on by lending you money.
Why do you need a mortgage valuation as a buyer?
As a buyer, you may be wondering what mortgage valuations are and what they mean for you. Mortgage valuations are standard procedure when buying a property. The valuation will determine the price you'll pay for the property.
Mortgage valuations are typically carried out by an independent surveyor who visits your chosen property to assess its condition and value, before writing a report to the lender which will be used to determine whether or not the seller’s asking price is reasonable.
This means that if your mortgage valuation comes back as being lower than what the seller has asked for, there's a good chance that they'll accept your offer - but it's not guaranteed! You should also make sure that you have enough money saved up in case there are any unexpected costs during this process.
The purpose of a valuation is to ensure that the lender is lending money at an appropriate rate of interest for the value of the property, which means that buyers should make sure they have their valuations done by independent valuers who will be able to give them an accurate assessment of what the property is worth.
Is mortgage valuation the same as property survey?
No. Mortgage valuation and house surveys are similar in that they both provide information on the size, condition and value of a property. However, they differ in that a mortgage valuation is performed by a lender or building society to check if the property being purchased is worth the price being paid for it. A mortgage valuation is carried out to determine whether it will be possible to obtain a mortgage to cover the cost of buying the property.
A property survey is carried out by an independent surveyor who has been instructed by the buyer of an estate to inspect its condition and report on any problems that may require attention before completion can take place.
How mortgage valuation is done?
Mortgage valuations are done in the UK by mortgage valuation specialists.
- A mortgage valuation specialist will visit the property to be valued, and assess its condition and its location.
- The mortgage valuation specialist will then work out an estimate of its market value based on these factors, including any repairs that may need to be carried out before putting it up for sale.
- The figure will be added to other costs associated with selling a property such as estate agents' fees and stamp duty, and this total is used to help determine how much money should be borrowed for a mortgage loan.
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