Published 17 Feb 2020

What’s the difference between a Mortgage Valuation and a Survey?

When it comes to buying a property, there are several options available to determine its value and condition. Simon from SRC Mortgage Solutions, one of our approved panel of Mortgage advisers provides a breakdown of the options available to help you make an informed choice when buying a home.

So which of these options should buyers choose and why?

Mortgage Valuation

When using a mortgage to buy a property the lender will insist that the property is valued. They need to be sure that the property you are buying is in good condition and valued realistically. In the unfortunate circumstance that the lender needs to repossess the property, they want to be certain that they can sell the property and get their money back. As Peabody Private sale and Shared ownership homes are 'New builds' the property condition will generally be acceptable to most mortgage lenders.

Even though you may pay for it, a ‘mortgage valuation’ is for the lender’s purpose only and you will not normally receive a copy. 

Simon suggests that, it is important to remember that a mortgage valuation is not the same as a survey.  A valuation won't uncover any potential faults with the property unless they are obvious - although it is unlikely that new build homes will have many defects.

A mortgage valuation is normally suitable for new build properties and properties under 10 years old.

Homebuyer’s Survey

A ‘homebuyer’s survey’ is a one that is completed on behalf of the buyer. You will therefore receive a report, which comments on the condition of the property and identifies areas that may require further investigation.

Although this is a ‘step-up’ from a mortgage valuation, it doesn't identify every potential problem with a property and you may still need to involve other professionals e.g. gas engineer, if needed.

A homebuyer’s survey may not be needed for newly built homes and is generally recommended for properties over 10 years old.

Full Structural Survey

Although this option will not be needed when purchasing homes through Peabody, the full structural survey is the most comprehensive survey available, and also the most expensive. Even though the person conducting the survey will normally be professionally qualified, they may still refer you to other professionals for further investigations e.g. structural engineer, gas engineer.

A full structural survey is normally recommended for older properties or those which are showing signs of disrepair.

 

‘Conditions’ in the mortgage

Watch out for 'conditions' in the mortgage - if a problem is identified with the property, the lender may sometimes insist that this rectified before they will release any money. A ‘condition’ of the mortgage will be stated in the mortgage offer, so it’s important that you check this document carefully.

In the excitement of buying a new home you need to make sure that all areas of the property are in good working order, it is therefore important to ensure that you choose the correct option for you and your home, whether you decide on a mortgage valuation or a survey always remember to seek professional advice.

Find private sale or shared ownership homes in and around London available through Peabody.


Related articles...

Published 25 Sep 2020

Insurance - What do you need to consider when buying a home?

We take a look at the types of protection that you should consider... when buying a home. Broadly speaking there are two types of protection to consider.  The first will protect the building and contents and the second protects the buyer against loss of income and in the worst-case scenario death.

Published 22 Sep 2020

The Conveyancing Process - Buying Your Home

Buying a new home is an exciting time but can also be quite daunting... as there is a lot of legal paperwork to sort out. This article aims to give you an idea of what takes place in the conveyancing process and the timescales involved.