Best Buy Mortgages Glossary - Valuation (Homebuying)
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Valuation (Homebuying)
This is a quick survey of a property by a surveyor - the purpose
is to assess the value of the property for the benefit of the
lender. Typically, the surveyor will look around the property in
the most general sense and then go off and talk to local estate
agents about property values prevailing in the area.
The valuation will be paid for by you the borrower, but is
really be for the benefit of the lender who'll use it as a basis
for deciding how much money to lend (and indeed whether to lend
at all!)
Lenders all have their own criteria by which they'll advance
money. For example some lenders may only be prepared to let you
borrow 70% of the value of the property in the form of a
mortgage. Other lenders however will be prepared to lend 100%.
See also Loan to Value (LTV)
Valuations tend to cost from £100 upwards with a sliding scale
used by most lenders with more expensive properties attracting
higher valuation fees. Clearly, the valuation figure can be
critical to whether a house purchase goes ahead. Surveyors tend
to be cautious when putting values on property. If they get it
wrong, their integrity can be called into question and they can
be sued for negligence.
A valuation is just that, if you want a more detailed snapshot
of your intended purchase, consider a
homebuyers report or a
full structural survey.
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