What is a mortgage valuation and how do you get one?

By SofiaMay 18, 2021London's Blogs

When deciding to purchase or remortgage a property, getting an accurate valuation is crucial. A valuation provides you and the mortgage lender with the confidence that the property is worth what you’ve specified in your application.

What is a mortgage valuation?

When you look to acquire a mortgage to pay for your property, a mortgage lender will arrange a valuation to make sure that the property is worth the amount they’re going to lend you to buy it.
A mortgage valuation is typically for the lender’s benefit as it doesn’t provide you with much information in terms of the state of the property itself. The valuation will only detail the information that the lender needs to know to secure the loan you’ve applied for.

It does, however, give you a snapshot of whether the price you’re paying for the property is accurate. Some lenders may provide you with a copy of the report while others may not provide you with the report at all. It’s worth checking with your lender whether you will receive the valuation report.

It’s also a good idea to ask your lender whether you’re required to pay for the mortgage valuation or if they cover the cost of the surveyor’s work.

How do mortgage valuations work?

Mortgage valuations can only be carried out by surveyors who are members of the Royal Institute of Chartered Surveyors (RICS). A surveyor traditionally visits the property for a short amount of time to value the property. After that, they will prepare a short report detailing the value of the property.

Depending on the circumstances, your lender may opt to value the property based on up to date data found online and from existing knowledge about the area and similar properties. The type of property and your lender’s familiarity with the area and building may determine which valuation you receive.

How do you get a mortgage valuation?

Your lender will use a RICS chartered surveyor to carry out the survey and produce the valuation report.

At London’s Surveyors and Valuers, we work with private banks, hedge funds, bridging lenders, solicitors, accountants and private clients.

Our valuers are always available to offer advice before or after a valuation has been carried out and we take pride in our quick and efficient turnaround times. You can find an example of a mortgage valuation we carry out here.

Different types of survey

If you require a more detailed survey of the property to understand the property’s structure and other aspects, a homebuyer report or building survey would be more appropriate. These reports are much more rigorous than a valuation and will provide you with plenty of detailed information about the property.

It’s important to note that some homebuyer reports can include a valuation. When you arrange your survey with a surveyor you should check if it is included and if it is accepted by your lender, to avoid paying twice for a valuation.

Homebuyer report

The homebuyer report includes the practical limits of the type of property and the scope of its coverage. This type of survey is typically more expensive than the lender’s mortgage valuation, but less than the building survey.

The surveyor’s main objectives are to help you make a well-informed decision on whether to go ahead with the purchase, whether the agreed price is fair, and to know what action to take before exchanging contracts.

The surveyor will give you their professional opinion on the features of the property that might impact the value and future resale. It will focus on:

  • Defects
  • General condition
  • Features
  • Other considerations such as safety matters, location, environment, insurance.

Building survey

A building survey is a very detailed report showing the property’s construction and condition. It can be carried out on the majority of residential buildings and older or untraditional properties. For example, if a building is particularly old or has been built using unconventional construction methods.

The survey can be tailored to your specific needs and produces a longer and more comprehensive report. The surveyor will advise on the nature of the repairs that are recommended and the state of the property depending on current standards and the type/age of the property.

What do you do next?

If you intend to get a homebuyer report or building survey in addition to the mortgage valuation it’s recommended that you mention this to your lender. This will make sure you don’t duplicate the surveys and can avoid paying for more than what you have to.

Want to find out more about our mortgage valuations, homebuyer reports and building surveys? Get in touch with us to discuss your requirements.

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