|Page 1: Types of survey
Page 2: Basic mortgage valuation
Hannah Shanks - Editor
Basic Mortgage Valuation
When you apply for a mortgage, the lender will require you to carry out a Basic Mortgage Valuation on the property. This acts as a kind of collateral for the mortgage provider to make sure that the property is worth the value which you are proposing to buy it for, i.e. what the mortgage provider is lending you. The main aim of this type of survey is to assess whether the property represents a suitable security against the amount of the mortgage requested. Some providers will not charge for this to be done, as an incentive to try and persuade you to take out the mortgage with them, otherwise the cost of the survey will depend on the size and purchase price of the property.
This valuation is not an extensive survey and will not provide accurate details about the condition of the property; major structural problems which will cost you a great deal of money often are not picked up in these types of surveys. The valuation also does not guarantee that the property is worth the asking price. The Council of Mortgage Lenders strongly advises homebuyers to get a more extensive survey than this one done when valuing the house.
How long do the surveys take?
If you ask for both the HSV and the Building Survey to be carried out there is often a preferential rate for combining the two, as some of the same features are covered in both. If you only want one of the surveys done, the HSV generally takes up to a day as the size of the building which this type of survey can inspect is limited, whereas the Building Survey can take between two days and a week to complete. The Basic Mortgage Valuation will take only a few hours.
How much do the surveys cost?
The cost of the survey will depend on a variety of factors, including the value of the property, its size and location, how easy the property is to access and, with the Building Survey, the level of problems the property has.
For a house that costs between £150,000 and £200,000, the average price for a HSV is between £300 and £420 and, for a Building Survey, it is between £560 and £730.
If the mortgage lender instructs you to use their surveyor to carry out the survey, an administration fee will often be included in the cost and therefore will be slightly more expensive than one carried out by an independent surveyor.
How do I find a surveyor?
A survey is a legally binding guarantee. Therefore, it is essential that the surveyor you employ to carry out the survey is legally allowed to do so. To find such a surveyor, check that they are a member of RICS or the Incorporated Society of Valuers and Auctioneers (ISVA). The RICS website also has a section enabling you to find all firms of Chartered Surveyors which are registered with them. Sometimes the mortgage provider will insist that you use one of their "in-house" surveyors to complete the valuation, otherwise they will not accept the survey as collateral for the mortgage. It is also possible to ask your solicitor who is dealing with all legal aspects of the sale, or the estate agent who is selling the house, whether they can recommend a suitable surveyor.
What to ask/tell the surveyor
- Before you have the survey carried out, tell the surveyor if you want to know any specific information about the house. You may have specific worries about the property, and this may dictate the subject matter of the survey.
- Check and see if your surveyor is qualified to do any of the tests for drains or woodworm if you wish to have these carried out. If he or she is not qualified, then arrange for another expert to do the survey for you.
- Clarify with the surveyor exactly what will be included in the survey.
- Read the terms and the conditions of the survey and check with the surveyor if you are unsure about any of them.
- Let the surveyor know if you are interested in making any structural changes to the property. They will then be able to inform you about any further survey to assess whether there may be damp or dry rot in any of the timbers or walls.