Mortgage offer

livalicious

Good morning!

We in the process of buying of a house, and the broker at bank we applying for a mortgage with, informed me the mortgage offer was approved on Tuesday. This is where im confused because the vendor's EA told me yesterday that the surveyor was booked in to do a valuation only yesterday??

I thought that a valuation was usually done first and then the mortgage offer. Is it possible that the surveyor could have verbally agreed the valuation with the lenders without actually seeing the place (the vendors were away on holiday all week until yesterday, so I know for a fact he couldnt have gone round there before then.) Is this common practise?

verytricky69

We had our mortgage approved on Tuesday. Our valuation hasnt been booked yet (hopefully it will have by the end of the day) The bank agree the mortgage and then do the valuation as far as i can tell.

They have agreed the mortgage- not necessarily the house you have chosen if for though (thats how i see it anyway)

livalicious

I thought the valuation was done first, so that the lender could confirm what the surveyor thought the value of the property was, and then they agreed what amount they would offer to you?

Estate_Agent

It sounds like you have an Agreement in Principle.

In principle, the lender is agreeing to you borrowing the money, but it will be subject to a valuation of the property you want to buy so that they know there is sufficient equity in the property, and subject to you providing whatever proof of income, payslips, bank statements etc that they require.

This is common practice and nothing to be concerned about. However, talk to your lender and EA and ask them to speak in plain English. It annoys me when people use jargon.

Good luck and I hope you enjoy your new home.

livalicious

Hi Estateagent,

Nope, its definitely not the AIP, I applied for that ages ago, and once we found this house, we formally applied for the mortgage, sent in paperwork, bank statements etc.

All that was left was the valuation (I asked the broker at the bank about this at start of the application, and she said the offer would only be confirmed once the valuation was done). Hence why I am confused as to how the offer could be done before the actual valuation. What would happen if the surveyor thought the property wasnt worth what we offered, would the offer then be amended??

goldbyron

It seems you have your formal mortgage offer i.e. all the checks on you personally are complete. However the valuation then has to verify that the property you wish to buy is mortgable and worth the loan you are taking out against it. Basically the bank is happy to lend you the money as things stands but still have to verify that the property (which is the security of the loan) is okay.

Oh btw how long did it take from your formal application (sending in all the statements etc) until the confirmation of approval?

livalicious

Thanks goldbyron! We initially sent our application form off on the 13th March, and again on the 20th as they hadnt received it. They wrote to employers on the 23rd and offer confirmed on 7th April. We havent received the offer in writing yet, but i did ask for a copy to be faxed, and it says the mortgage has been approved.

Once the valuation is done, do we get a copy of his report too?

goldbyron

Yes you will get a copy of the report. Even if the property is fine for the mortgage company there may be some issues you will want to explore prior to exchange - for example indications of damp or roof condition. Your solicitor should be able to advise and/or local tradesmen can come and give quotes or inspect any issues that are raised. Although if its just a valuation and not a Homebuyers survey - the report will be very basic and only pick up on major obvious defects like subsidence that would affect the house as a security asset.

So 3 weeks for the confirmation - okay I feel easier about my buyers now. It has only been 2 weeks today and they had to send off the payslips last week. Phew.

livalicious

Ooh hang on, mystery solved . The EA just rung me, and to cut a long story short, there was a bit of mix up with their office and the surveyor's office, turns out he had already done the valuation on the 1st April!!!

Thank for all the replies anyway!

ps. Goldbyron, hope your buyers get their offer through quick and good luck with it all!