NUB News is pleased to share the latest advice from one of our community partners, the family-run Kenilworth based GAM Home Loan Specialists Ltd.

GAM HLS is a family run Financial advice company and has issued this latest helpful summary of frequently-asked questions about Mortgage Valuations and House Surveys.

What is a mortgage valuation?

A Mortgage Valuation is an assessment of a property instructed by the Mortgage Lender you are applying to. They instruct a valuer/surveyor from an external company to assess the property. Lenders want to ensure that the property provides adequate security for the mortgage loan. If you default, they need to know they can recover their investment by selling the property.

Frequently Asked Questions:

Is there a cost to me for the Lender's valuation?

The Lender often covers the cost of the valuation. However, some lenders still charge between £100 and £300 for a residential mortgage application.

Do I get a copy of the report?

This can vary depending on the Mortgage Lender. Some will just tell you the amount it has valued for, others do produce a 3-page document. It is not a detailed survey; it is mainly facts about the property and not information on the condition of the property.

Will the Valuer go out to the property or assess it online?

This can again vary depending on the Mortgage Lender. Some lenders now have good automated systems. Remember, Lenders are doing the valuations to assess their security against the loan. The lower the loan and the higher the equity in the property then the lower the risk to the Lender, therefore the less likely they are to fully assess the property. i.e. if you are buying with a 10% deposit, they are likely to visit the property. And if you are ReMortgaging with a 40% deposit, they are likely to assess the property online.

Can the Valuer reduce the value?

Yes, it is the Valuers job to provide the Mortgage Lender with an accurate value. This can mean that sometimes they reduce the value of the property. This is often referred to as "Down Valuation". If you are purchasing then sometimes this can be helpful to know if you are overpaying on the property, it may give you an opportunity to negotiate with the Vendor. The Vendor may refuse to negotiate and insist on selling at the agreed price, especially if they have other interested buyers. This could cause an issue to the "Loan to Value" and you may have to find the cash to bridge the difference. Your Mortgage Adviser will be able to navigate you through the options here.

Are Mortgage Valuations completed for a ReMortgage too?

Yes, if you are switching to a new lender. No, if you are staying with your current lender.

What are some of the common issues that Mortgage Valuers find?

As mentioned, the valuer is not assessing the condition of the property in great detail, but they often do find issues with: External Cladding, external cracking potentially indicating structural movement, Trees too close to the property and unclear terms on leasehold properties.

Do I also need to get an independent House Survey?

It is generally advisable when purchasing a property to get a house survey. We recommend doing this separate of the Mortgage Valuer. This is most commonly a "Homebuyer's Survey". It is a comprehensive survey of the condition of the property. It will uncover potential issues with the property, for example, issues with the roof, gutters, windows, damp. They can be very useful and give you peace of mind that the property you are buying doesn't have any major issues. These can take weeks to get the report. They are also likely to cost between £500 and £1,000. The other survey is a "Full Building Survey" which is for older properties or property in worse condition. These are more expensive.

While surveys can seem like an added expense, they are important for identifying potential issues that could lead to costly repairs down the line.

Navigating the mortgage process can be overwhelming, but you don't have to do it alone. 

As experienced mortgage advisers, we are here to guide you through every step, ensuring you find the right mortgage for your needs. Contact us today for personalised advice and support on your mortgage journey.