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Basic Valuation is required by all Mortgage Lenders as a minimum level of mortgage valuation before agreeing to release mortgage funds for either a home purchase or a remortgage.
So, here we take a look at Basic Valuation and other types of mortgage valuation and how they work, along with why you need a property valuation and which type of valuation might be the most suitable for you, plus further information as to how we might be able to assist.
Table of Contents:
Basic Valuation is one of three types of mortgage valuation, we'll discuss the other two types in a moment or two. All mortgage lenders require the minimum of a Basic Valuation before agreeing to release mortgage funds for either a home purchase or remortgage.
Although the customer has to pay for the cost of the basic valuation, it is prepared for the use of the lender, and only confirms that the property will act as suitable security for the lender's purposes. The basic valuation does not provide any guarantees for the borrower, and if fault is subsequently found with any aspect of the property, the borrower has no redress against the valuer or lender.
So, as we mentioned earlier there are infact two other types of mortgage valuation. These are:
A Home Buyers Report is also paid for by the customer, however, unlike the basic valuation, the Home Buyer's Report is written for the benefit of the borrower. It provides more in-depth details of the property, and lists the major faults, so that the borrower may use the report to confront the vendor either to rectify the deficiencies or adjust the price to take account of the fault.
The Home Buyers Report is considerably more costly than the basic valuation, approximately twice as expensive. However, it does provide the customer with a degree of protection, as the customer will have the right to sue the valuer if they have been negligent in their report.
A Full Structural Survey valuation, sometimes referred to as a building survey, is the most comprehensive of all, and reports all faults, both major and minor. Again the customer has the protection of being able to sue the valuer in the event that problems are subsequently discovered. The cost can be as much as £600 - £800 or more for an averagely priced property.
So, which type of mortgage valuation should you choose?
Well, the most appropriate valuation will depend on the age and type of property that you are buying. Newer homes, built to standard construction methods for instance, may warrant only a basic valuation, especially if the property comes with a builder's NHBC Certificate (National House Building Council Certificate). Whereas in situations where the property is older, or built of unusual construction; it may be more prudent to instruct one of the more thorough valuations.
Professional advice is generally to opt for a full structural survey in all cases. The amount spent on a full structural survey, although considerably more expensive than a basic valuation, is usually far less than 1% of the property's worth!
You'll also have details of all the faults, both major and minor, and you may find that you can recoup the cost of the survey on identifying just one problem - either by a price adjustment, or having the vendor fixing the fault! Similarly, if problems do arise in the future on something the valuer had missed, then you have the redress to sue for damages in negligence!
So, if you are in any doubt, you should opt for a full structural survey.
Although a valuation is only an opinion; it must be carried out by a professional valuer, usually a Chartered Surveyor, approved by the lender. The process will involve the valuer inspecting the property, as well as comparing the price of recently sold properties of a similar type within the same locality.
There are many costs involved when purchasing a property, and there can be a temptation to cut corners, especially when it comes to property surveys! Remember, that as the buyer, you are responsible for ensuring that what you are purchasing is in good order. Here are just some of the benefits of instructing an independent valuer's report:
Hopefully this explanation regarding the basic valuation and other mortgage valuation options has cleared the waters for you a bit. So, if you are thinking of applying for a mortgage or remortgage, and would like further information on fees and other costs, please either contact us online anytime, or call us and speak with one of our qualified Mortgage Advisors who will be only too happy to help. Our Freephone Telephone Number is 08000 282 281, and our lines are open 7 days a week from 8am until 10pm, we'd love to hear from you!
The overall cost for comparison is 9.8% APR.
The actual rate available will depend upon your circumstances. Ask for a personalised illustration. APR variable and based on a usual case. Most customers are likely to receive a lower rate or the same rate as our overall cost for comparison rate - learn more about APR.
There are no upfront broker fees.
However, a fee may be charged on successful completion. An indication is that on conforming cases (straightforward applications with no or minimal adverse credit) a fee may be charged of up to 1% of the amount advanced, typically £795 and will depend on your circumstances.
For non-conforming cases (where case research and processing may be more complex due to adverse credit or unusual circumstances), a fee may be charged of up to 3% of the amount advanced, typically £1,995.
THINK CAREFULLY BEFORE
SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED
IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
Adding existing debt to your mortgage will increase the repayment term and overall cost.
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