Valuing your home for mortgage or re-mortgage purposes

Understanding the true value of your home is essential for a seamless purchase or remortgage process. In this guide, we'll delve into the intricacies of mortgage valuations, including what they entail, their costs, and how to navigate potential pitfalls. Should you have further inquiries, our local branch finder is at your service.

What is a mortgage valuation?

A mortgage valuation, often termed a valuation survey, is an assessment conducted by a mortgage lender to ascertain the property's worth. It ensures that the property's value aligns with the proposed purchase or remortgage amount, significantly influencing the lender's decision to extend mortgage funds.

Your lender may also conduct a mortgage valuation when you seek to remortgage your existing property, verifying its value against the documentation provided.

While mortgage valuations primarily serve the interests of lenders, they also offer insights for buyers, helping them gauge if they're paying a fair price. Distinguishable from a standard house valuation, a mortgage valuation centres on the property being acquired, rather than sold.

What to expect from a mortgage valuation

When does a mortgage valuation occur?

Typically, a mortgage valuation happens after agreeing on a purchase price with the seller, and once the property is withdrawn from the market. It happens after submitting your mortgage application but before receiving the lender's formal mortgage offer.

What do mortgage valuers look for?

Carried out by a surveyor, a mortgage valuation might not always require a visit. Depending on the data and knowledge of the area, some lenders might just check the outside. Surveyors look for unusual building materials and any visible structural problems that could affect the property's worth.

Implications of valuation discrepancies

If the valuation is higher than what you offered, that's good news—it means you got a deal below what the property's worth. On the flip side, if the valuation is lower than expected, it could lead to a 'down valuation,' where the surveyor says the property's value is less than the agreed sale or remortgage price.

Managing valuation risks

In the event of a down valuation, exploring alternative lenders or appealing the valuation with your current lender might offer solutions. However, these avenues don't guarantee success. To pre-empt such issues:

  • Research the property's value by analysing recent sales of similar properties in the area.
  • Seek an expert opinion from a local estate agent like Felicity J. Lord, who can provide insights into market dynamics and suggest a realistic price.
  • Make an informed offer based on your research, potentially below the asking price if justified by market trends.

Cost of mortgage valuations

The cost of mortgage valuations varies based on property value, typically ranging from £150 to £1,500. While some lenders offer this service for free, it's essential to consider the associated expenses.

Mortgage valuations vs. house surveys

Mortgage valuations and house surveys serve distinct purposes. While mortgage valuations assess a property's value for lending purposes, house surveys provide comprehensive assessments commissioned by buyers to uncover potential issues impacting property value or resale potential. Unlike mortgage valuations, which may not grant access to the valuation report, house surveys offer detailed insights. The main types of surveys include:

  • Condition Report
  • Homebuyer Report
  • Building Survey/Full Structural Survey

For prudent buyers, opting for at least a Condition Report is advisable to mitigate unforeseen risks.

Navigate mortgage valuations with confidence with Felicity J. Lord

Understanding how to value your home for a mortgage or remortgage requires careful thought. By learning about mortgage valuations and getting advice from experts, you can go through the process confidently and achieve good results. Contact our team at Felicity J. Lord for your mortgage valuation enquiries.