What happens to money paid to lender for Valuation?

helping_hubby

First time buyer, so not sure of things here...

The money for the valuation/survey of the house has been debited from my account by the lender. We still haven't heard if we've been accepted for the mortgage.

Is this normal? Is the valuation done as part of the process of being accepted? So if we get rejected do we lose the money we paid for the valuation?

ds1980

if theyve taken the money for the valuation then youve been accepted for the mortgage.

spunkeyrich

not necessarily, unless you said when you did the application to not bank the cheque until youve been accepted.
Otherwise they will bank it then instruct a surveyor at the same time as the application goes through. However, if you tell them not to send the surveyor out until you have been accepted then if it all falls through, you should get your money back as they havnt earned thier money yet.

rich

honeypop

When we got our first house a month ago, the valuation was done as part of the application process, ie: acceptence depended on valuation report, so no decision could be made til it was done, so had to pay for it either way.

You should ask your mortgage advisor about it, they will tell you more as they know what's going on.

helping_hubby

Hmmm, OK. Thanks for the responses. I was hoping that if they took the money then at least our financial side might have passed. But maybe not...

Will call IFA to find out.

Voyager2002

Many lenders refer to an "application fee" that includes the valuation. I think that no matter what happens, you will not see this money again. However, if the information you have given the lender raised any doubts about whether you would be accepted as a borrower, they should not have taken the fee before making a decision in principle. Anyway, since mortgage lending is generally safe (you are not going to run away taking the house with you!) I would imagine that unless you have a conviction for fraud you are unlikely to be turned down.

me98sjc

Hello,

In a similar situation, we're selling our house to finance the move to a new one. We have been accepted for the mortgage but it is dependent on the valuation - the bank / building society needs to know that what they are lending you is appropriate for the value of the house (e.g. house worth £200k but a requested mortgage for £300k = something a bit fishy).

If you have a full survey (structural) or homebuyers ("the middle one") the cost of this usually includes the valuation (which might only be drive-by by someone to say "hmm, yes, that's about the right price"). That valuation report is sent to the bank / building society to prove that you're borrowing an appropriate figure for the house you want to buy. The rest of the report (if you're having something other than a valuation only) is sent to you and not the mortgage lender.

That's what I understand to be the process, we're lending with HSBC. Other lenders might have a slightly different process.

Hope that helps!
Sarah

helping_hubby

OK I spoke to the mortgage advisor and now what he said rings bells. My heads in such a state at the moment, I just can't think straight. It turns out the money came out automatically, and if we get rejected we get most of it back minus an admin fee.

So unfortunately it means !!!!!! all with regards to being one step closer to being accepted.

ds1980

I think that this is appalling procedure. There's no way that they should take any money from you until your sure everything is going ahead. My new mortgage company has said it will be £415 for the valuation on a £250k semi!!! Ive told them i can get a full building survey done for less than £400.....still in negotiations but ill simply find another mortage company if they don't comply.

MJMum

I have to agree - my mortgage valuation is £410 (Yorkshire Building Soc) but the building survey is only £700! Most of the £410 is really a "fee" to the society, not the true cost of a valuation. If I wasn't "porting" to avoid early redemption fees, I'd tell them where to place their £410.

helping_hubby

Well ours is £295 for a valuation, but this is just a valuation. We're also paying a fee of £699 for a 5 year fixed rate. We've had a quote for £425 for a mid surveyers report (not the full structural, but next one down).