Purchase
When purchasing a property any lender looking to arrange a mortgage would insist on a valuation being carried out on the property in question. However there are three types of survey, and of course three levels of cost, and it is important that you understand the difference between each one to enable you to select the most appropriate dependant on your circumstances.
Mortgage Valuation Report
This is the minimum required by the lender and will be carried out by a valuer employed by the lender or an independent panel valuer working on behalf of the lender. It is primarily to enable the lender to assess the property as security for the loan and, even though it is paid for by the borrower, not all lenders will provide you with a copy of the report. It’s based on a limited inspection and certain defects in the property won’t necessarily be revealed. It’s therefore important that you don’t just rely on this report when you’re deciding whether or not the property is suitable as a home and an investment. We strongly recommend that you obtain your own more detailed report on its condition and value, based on a fuller inspection.
Homebuyers’ Survey and Valuation
Approved by the Royal Institution of Chartered Surveyors (RICS) this is a more detailed report which provides information on the state of repair and condition of the property. It will provide information on the significant aspects of the property’s condition along with the surveyor’s/valuers opinion as to the current market value. Armed with such information you may then be in a position to negotiate on the price of the property or cost of essential repairs which otherwise would be your sole responsibility once the purchase had gone through.
Although a more detailed survey, it will not cover parts of the property which may be covered, unexposed or inaccessible such as lofts and cellars. As you would expect the cost of such a survey is more than for a Mortgage Valuation Report. However, if you choose to arrange this through the lender they can arrange for the same surveyor/valuer to do both at an inclusive cost that will be known at outset. Should you choose to have the Homebuyer report done independently the lender will still insist upon their basic Valuation Report being carried out which could lead to an increase in costs.
Building Survey (formerly known as a Structural Survey)
This is an investigation and assessment of the condition and construction of the property. The extent and cost of the survey will be subject to a specific agreement between you and the surveyor and would depend upon which aspects of the building require particular attention. Again, the lender would still insist upon their Mortgage Valuation report.
To enable you to decide which survey to ask for it is therefore advisable to speak to the surveyor first and find out what each will involve in relation to both cost and the level of checks carried out. And for a Building Survey in particular it is advisable to get quotes from more than one surveyor.
Re-mortgage
When re-mortgaging to another lender a valuation report will still have to be carried out. In this instance a Mortgage Valuation report will suffice as the only concern is for the lender to assess the property as security for the loan. However, in a competitive market, many lenders offer this as a free service whilst some offer a refund once the mortgage has completed.
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