Lender vs Private Survey

Your mortgage provider will conduct a valuation of the property to verify that it is mortgage-able. However, you should always have an independent survey done to protect your rights.

Your offer has been accepted and you are now ready to buy your home. However, before your lender approves your mortgage, they will need to conduct a valuation of the property. Many people believe that a valuation is a complete survey. The surveyor will raise any concerns with you, your lender, or your solicitor. However, this is incorrect. What is a mortgage valuation and why are you required to have one?

Valuation of mortgages

A mortgage valuation does not serve as a survey to the buyer’s advantage. A mortgage valuation is one type of assessment that a lender does to validate a mortgage. This is done in the interest of the lender to evaluate the lender’s risk exposure. This may cost you money to approve your mortgage. You might not even receive a copy.

It is common for a bank, building society, or other financial institution to lend money to someone to purchase a property. The loan is secured against the asset that is being purchased. This basically means that the bank will have a lien on the property until the loan is paid off. If you stop paying your loan payments or the lender is unable to recover the money, the bank will take possession of the property. The lender must be certain that the property can be sold for the amount they owe you. They must value the property in order to be certain that they can recover their loss. This will ensure that the property is worth more than the amount they loan you or the amount they will accept as security. This is called a loan-to-value ratio. The lower this ratio, the bank is less at risk.

When visiting the property, the surveyor will be following the instructions of the lender. The surveyor will be given specific instructions by the lender. Some lenders won’t lend against certain types of property or highlight specific features or characteristics that are not suitable for mortgages.

Although the final report will only contain a few pages, it will include all details about the property and the recommended valuation. These are commonly called tick box valuations in the industry. They are fast and include multiple-choice fields. These valuations only provide a summary of the condition and do not go into any detail.

This report will not be beneficial to you as you need to have an objective view of the property’s condition and whether it is likely to become a burden. Lenders want to assess your risk. They don’t care about what you can spend on repairs after you move in or how much you make on resale. This is why an independent RICS surveyor will be required.

Independent survey

The RICS suite includes the Condition Report, Level 1, the Buyer Report, Level 2 , and the RICS Building Survey (Level 3).

RICS Home Surveys (Level 2) can be used by property buyers to help them understand the building they intend to buy and how it will perform in the future. If the surveyor discovers significant defects that are costly to fix, these reports can be used to help you renegotiate your purchase price.

After you accept your offer, an independent survey is usually done. To get a quote, you can use our instant online questionnaire form. We can also do one for you. Call us at 01744 4212700 to discuss your needs and determine which survey is best.

RICS Home reports come in three levels. The condition report is the first level. These reports assess the building’s basic condition. A condition report is recommended for all new constructions, small flats, as well as conventional properties.

Level 2 is RICS Homebuyers Report. This reports on the condition and costs of the property. They are performed on buildings less than 80 years of age.

The Building survey at level 3 is for older buildings that are more substantial or have had renovations or extensions. The report is very in-depth, but it does not include a valuation.

These reports will provide you with the information you need in order to make informed investment decisions. The surveyor will act on your behalf. They will be available to discuss the findings with you and offer advice if necessary.