The lender needs to ensure that your estimate of the value of the house is correct as your house as their lending is secured on your home. You will normally have to pay for this valuation to be conducted.
There are three types:
i. A mortgage valuation
This is a very simple inspection of the property and is the minimum requirement to acquire a mortgage. It will involve a very limited inspection of the property and is not in any way a survey. It is just a confirmation to the lender that the property is worth sufficient security to cover the mortgage.
If you have instructed a survey independently of your mortgage application, most lenders will expect you to pay for a mortgage valuation with their own Valuer/Surveyor as this is the minimum valuation requirement.
For a remortgage, this is only valuation option. Often the lender’s Valuer is happy to conduct a ‘drive by’ valuation without entering the property.
ii. A homebuyer’s survey and valuation
This is suitable for a standard property type which is not very old and will advise on value as well as giving a more detailed report on the condition and state of repair of the property. Minor items of disrepair (that are aesthetic and do not affect the value of the property), which do not materially affect the value, will not be reported.
iii. A building survey
This is a very comprehensive survey of all parts of the property. Advice on the value of the property is not included. This type of survey may be more appropriate for larger, older properties or non-standard buildings or buildings of a commercial nature. This survey is the most expensive of all 3 types of survey.
It is up to you which type of survey you feel happiest with but you should remember that the risk is solely yours when buying a property. For this reason it is strongly recommended to have a homebuyer’s valuation and survey undertaken as a minimum.
Where the lender’s surveyor finds defects at the property, ultimately it will become a condition of the mortgage offer that the defects are rectified quickly by whoever has agreed to complete the works, the vendor or buyer. Sometimes the lender may even retain part of the loan until the works have been completed with proof.