Mortgage Valuations - Frequently Asked Questions

A mortgage valuation is a mandatory part of the mortgage process, but can often lead to confusion.

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Hello everyone, this is Dan and Kye from Crescent Mortgages coming to you with more of our FAMQ's - Frequently Asked Mortgage Questions and today's topic is going to be... What are we talking about today Kye? Valuations! Mortgage valuation reports. Before we jump into it, as always if you can like, subscribe, like and subscribe and if you have any questions for us you can either leave them in the comments, or if you want to contact us directly, we are regulated and authorized mortgage brokers, then you can hit the banner which should be popping up at some point in this video and you can message us directly through our website.

First of all, mortgage valuation reports. So the reason we're doing this today is because we actually do get a lot of questions and confusion from our clients in this area. People hear the term valuation, they hear the term survey, and there's people just don't really understand what it is, what it's for, or who organizes it. So what's the difference a valuation and a survey? Good question there's not really any difference at all, a valuation and a survey are pretty much the same thing there are different levels of it but ultimately it's the same thing so it's just a surveyor having a look at a property to confirm that they're happy with the condition and the valuation of the property, so the value of the property, but there are different levels of it and ultimately it is the same thing. So I guess first of all Kye maybe tell them there are usually three main types of valuation or survey if you want to give a bit of info there. Yeah, so you've got three. Your most common, the cheapest, basic and mandatory valuation is the basic valuation, sometimes referred to as mortgage valuation. You then come up from there for a home buyers report which is the middle ground and then a full structural. So they obviously the higher you go up the more comprehensive they get, the home buyers report, and the more expensive they get, so home buyers report like it says middle of the road they kind of give a bit of a traffic light system in terms of red amber and green in terms of certain issues with the property that you may want to get looked at in more detail and then the full structural survey where they will really look at the property in a lot of detail and they should really pick up any kind of possible issues that the property may have. Why would someone go for a home buyers or a full structural survey?

Yes it's probably two reasons, I would say that you know if you're buying a 1800s cottage then you might be worried the thing's going to fall down if you're spending hundreds of thousands of pounds on a property you might want to know that it's all right and it's not going to cause you problems. The other one is the more comprehensive reports, the home buyers and full structural, you do have some sort of come back against the surveyor if they make a mistake or get it wrong which can be quite useful again. Whereas if you go for just the basic mortgage valuation which like we say is the minimum that you will have to go for then the surveyor is just acting on behalf of the lender so if they miss anything or there's issues with the property and you go on and complete on that property, unfortunately there's nothing you can do. The surveyor wasn't acting on your behalf and and that property is then your problem even if there are major issues with it. As Kye mentioned at the start the mortgage/basic valuation is mandatory to get a mortgage so as part of the mortgage assessment the lender has to carry out a valuation, normally it's free with a lot of lenders they'll give you a free basic valuation these days, but there are still one or two that will charge you, but usually it's relatively cheap. On the whole they are free and like I say that is a mandatory part of the mortgage process but you don't need to organize that, your solicitor doesn't need to organize that, the bank will organize that and they will usually send the surveyor to the property to have a quick look and basically come back with a valuation and to let them know if there's any kind of major problems. I guess maybe just highlight the different types of basic valuation? Yeah, briefly, you know a basic valuation isn't always a surveryor or valuer coming out to the property to look over it., they may do it through the computer and simply look at properties in the area that've been sold or they might just drive past it and make sure it looks like a detached house like you said it was and that might be enough, which is sometimes a bit quicker and a bit easier. So you don't really have a say in what one they go for but the bank will determine what type of valuation they're going to do, what type of basic valuation they're going to complete, but yeah you can either have a physical drive-by or an online or desktop valuation. Anything else to add Kye?

No I think that summarises valuations. Yeah I mean it's a relatively simple subject but I think again a lot of people just kind of get the terms a little bit confused which makes it a bit more difficult but it is pretty straightforward.

If if you do have any questions you can either leave them in the comments or hit the banner which again should be popping up somewhere on the screen and drop us a message directly through our website and we can obviously come back to you and discuss it in more detail have a great day and we'll see you next time, thanks