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  • Step 2a - Check the Property: Mortgage Valuation Process

    3rd October 2017

    The mortgage valuation process is the start of getting your mortgage offer. The mortgage in principle you got earlier provides an indication of what you can afford – but mortgages are specific to the property so here you check that your lender is willing to provide a mortgage.

     

    Your mortgage lender will send a surveyor from their panel to conduct a mortgage valuation. This is where the surveyor does a short check of the property to make sure there are no obvious issues affecting the property’s value. The value will be based on sale prices of similar properties in the area and the current market conditions. The mortgage valuation is produced for your lender so that they know if the mortgage they are lending is recoverable in the event you defaulted and they had to repossess the house.

     

    If the mortgage valuation matches your agreed offer then you will be provided a mortgage offer and you can move on to the next state – getting an independent RICS survey.

     

    If your mortgage valuation is lower than your offer then you have to make a decision:

    1. Renegotiate with the seller – find out if they will sell the house for the price that your mortgage lender has stated it is worth

    2. Justify why the valuation is wrong – provide real examples that show why the mortgage valuation is incorrect. In reality a valuation rarely gets changed but it is worth trying if you feel there is strong evidence to back up why it is incorrect.

    3. Find an alternative mortgage on a higher loan to value – this will allow you to borrow more money to cover the difference between what the property is worth and what your offer is. This will increase the cost of your mortgage.

    4. Search for a different property – if you are unable to resolve the problem using the steps above you will need to need to go back to the property search.

     

    During periods of uncertainty where property prices are stagnant or declining, mortgage valuations can often come in lower than your agreed offer.

    Go to your next step – getting a building survey or go back to making an offer.

    Progress: 44% complete