We have been doing a lot of mortgages for first-time buyers recently, and one of the common questions we are getting asked is around surveys, and valuations, and which one is right.
Now, I do need to caveat this article and say that I am not a surveyor and I don’t know the property that you’re buying, so I can’t advise you which one to have, but what I can do is tell you the fundamental differences upon each. And there’s three.
1. Mortgage Valuation
The first one is a mortgage valuation or a mortgage survey, and that is where the mortgage lender is sending somebody around to the property that you’re buying to make sure that it’s okay for them to lend on. So this is for the lender, and it’s basically the person’s going to go in there and say, “Yes, it is worth x-100,000 pounds, and, yes, we’re okay. And you’re happy. You can lend your money on it.”
2. Home Buyer’s Report
Number two is more for you, and that is a home buyer’s report, and they’re going to send the same individual potentially around, the surveyor, to look at the house, and they’re going to give you a report based on the property. They’re going to go into a lot more detail, and they’re going to look at key things within the structure, within the garage, within areas of the house that might be of concern, like fireplaces, or is there any potential damp, or anything at all like that. And usually it comes out with a 40 to 50-page report, and it contains red, amber, and green areas. Generally, the reds you need to get some sort of advice, or you might need to send an expert around. For example, if they saw that there was an issue potentially with the boiler, that might be something they would send somebody around, or recommend you get somebody around to look at. An amber might be something … There might be a beam in the garage, for example, that needs to be looked at just to make sure that it’s okay, and it’s safe, and it’s secure, because there’s a bolt come out of it, or something along those kinds of lines. And you need to get somebody around to go and have a look at that. Then in terms of the greens, you don’t need to worry about those areas. It’s all good. But it gives you a little bit more detail on the property.
3. Full Structural Survey and Report
The third type of survey or valuation is a full structural survey and report, and this usually comes with warranties and guarantees, and it’s the same person going ’round, but they are literally going through every nook and cranny. They might take some samples. They might get up in the loft and look at whatever they call things in the loft. I don’t know. They might get up in the loft and actually look at detailed parts of the property. If it’s had an extension, or if it’s had a conservatory, they might even assess the foundations of that to make sure it’s all okay for you.
You need to choose which one is right for you. Take advice from somebody who is a surveyor, or in the building game and perhaps knows the property. You know, the other alternative is you take somebody around who you know who works in property, who’s in construction, who is a builder who can actually look at the home that you are buying, but, generally, the mortgage lender only requires a valuation. The next two, the home buyer’s or the full structural, is your choice.
To give you an example as well, a lot of mortgage lenders now give you the basic valuation for free, and then the full structural and the home buyer’s is dependent on the value of the property that you are buying. So the more expensive the property, the more expensive the survey, and that could range from £500 right the way through to £1500.
Thanks very much, and I’ll see you soon on the next one.