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- The Secret About Prescriptive Easement: Top Guide 1 Must Know - December 4, 2023
- About Home Equity Loans In Texas And How Can One Obtain It - November 27, 2023
About Mortgage Survey
When you are buying a new property it is best to know whether the market value of the property is adjacent to the sales prices asked.
The mortgage lender that would be providing you the mortgage would like to ensure that the value of the home that you are buying has enough value to cover the loan that they are lending you.
Hence, it is a good practice to conduct a mortgage survey. In this post, we will understand what is a mortgage survey and its importance.
What is A Mortgage Survey?
Most mortgage lenders will require you to get a mortgage survey before the loan is approved.
The sole purpose of this survey is for the lender to have a legal outline of the subject property including the land and boundaries.
When a new parcel of land is being developed, a survey is formed to define the out spread of the property to understand the legal structure of the property.
Lenders often want to find out what structures are on the land and where they are located.
For example, if there is a deck, pool, porches, shed or backyard on the property, the lender will always want to know their size, location, and type because they can affect the value of the property.
The mortgage surveyor will conduct a brief inspection of the property which might take less than twenty minutes.
They combine their findings with information about similar local properties and comparables.
Sometimes, restoration value is also calculated that can be used as part of your home insurance.
Who Benefits The Most From The Mortgage Survey?
This type of survey is for the benefit of the lender that is lending you money to purchase this property.
In some instances, the borrower may not even receive a copy of this survey. This report will help the lender to decide whether or not they can lend you the money required to purchase the property.
The report is brief and will show only the main and obvious defects, which can have a significant impact on the value of the property.
What Is The Importance Of the RICS Mortgage Survey?
It is recommended by experts that you carry out an independent RICS building survey before purchasing any property.
According to the Royal Institute of Chartered Surveyors (RICS), only 20% of home buyers carry out an independent survey before buying a home.
This is although buying a home can be the biggest investment of a lifetime for many.
However, with many people spending hours or minutes looking through a potential new home before making an offer, it’s even more important to get professional advice on the condition of your property.
This will avoid any complex situations or unexpected shocks that you might have to experience once you move into your new home.
If a potential buyer is only looking to know the value of the property, it is a good idea to request an RICS valuation report.
This report will provide a more accurate market value of the property compared to a mortgage survey.
There are three levels of home inspection that report on the condition of the home.
- RICS Level 1 – Property Condition Report.
- RICS Level 2 – HomeBuyers Report.
- RICS Level 3 – Building Survey.
Conclusion
The mortgage survey requirement for the property that is required by the lenders depends on the state the property is located. This survey is usually ordered by the mortgage lender or the title company.
If you are not sure about the level of the survey that you require to buy the property in your area, it is advised to speak to your trusted contractor that can help you to determine which level of survey is most suitable for your property purchase.
You would be charged to obtain a mortgage survey; hence, you can shop around to check with multiple contractors and go with the one that you are most comfortable with.
