Building Survey v Standard Mortgage Survey, What Should You Choose?
Discover why a complete building survey offers significant advantages compared to a standard mortgage valuation.
Learn why choosing a full building survey provides substantial advantages over a typical mortgage valuation.
Navigating between a mortgage valuation and a full building survey can be confusing, especially for first-time buyers. At S Jones Surveying, operating in the Northeast of England, we provide clarity on these distinctions and advocate for the thoroughness of a full building survey.
A Report Tailored for You.
A mortgage valuation is not a survey; it is for the mortgage company or lender to confirm in their opinion if the property is worth what you are paying for it and that it is mortgageable. They will also be looking to provide an Open Market Valuation, which will give a realistic idea of what the property is worth in the current market. You may have to ask to see the mortgage valuation report, do not automatically assume that you, as a prospective buyer, are entitled to a copy.
It is important to understand that a mortgage valuation is not conducted for the buyer’s benefit but for the mortgage company or lender. This valuation aims to confirm whether the property’s value matches the purchase price and meets mortgage criteria. Additionally, it includes an Open Market Valuation, offering an accurate assessment of the property’s market value in the current economic climate. As a prospective buyer, you may need to request the mortgage valuation report directly from the lender. Do not assume it will be automatically provided, as access to this report is crucial for making informed decisions about the property purchase.
A full building survey does not usually include a valuation, unless specifically requested.
There are other advantages. It is written for you, not the mortgage company; and as the person commissioning the report, it will be sent to you.
Detailed Insights
Mortgage valuations provide minimal detail, especially regarding the structural condition of the property, typically noting only the most obvious or significant defects.
Full building surveys offer extensive inspections of a property’s internal and external areas, focusing on identifying evidence of structural movement like subsidence (both historical and active), timber issues, dampness problems, and roof conditions. In contrast, mortgage valuation surveys provide less detailed coverage of these areas, often overlooking critical aspects highlighted in a comprehensive building survey.
In addition, any of the above issues are raised and likely to affect a mortgage offer, they will request further investigations, as a condition of the mortgage.
Additionally, if any of these issues are brought up and are likely to impact the mortgage approval process, the lender may request additional investigations as a prerequisite for finalising the mortgage.
Time Evaluation
Mortgage valuations for smaller properties can be completed quickly, often within minutes (though usually longer). While remote or virtual valuations are an option, an in-person visit is usually necessary for an accurate assessment of the property’s value.
The duration of a full building survey can range from two to three hours or beyond, resulting in a report that is notably longer and more comprehensive than a mortgage valuation.
Costs & Expenses
While a mortgage valuation comes as part of the lender’s mortgage offer at no extra cost, opting for a full building survey incurs an additional expense for the buyer. However, this investment is highly advantageous. A thorough building survey is indispensable for older or unique properties, identifying hidden defects and offering essential guidance on maintenance and repair requirements.
While it may seem like an added expense, obtaining a survey could save you money by preventing surprise repair costs later. Moreover, the survey report can be used to negotiate with the seller and potentially lower the property price to cover the cost of repairs.
Furthermore, during a downturn in the property market, mortgage valuations often reflect caution by assigning a lower property value. Although this caution benefits the lender by minimising risk, it may create hurdles for the buyer if the property’s value does not align with the agreed purchase price.
In the absence of renegotiating the price with the seller, you will be required to offset the valuation or mortgage offer shortfall through a higher deposit.