Paying for Valuation Before Mortgage Approved

Northernsoul123

We have an AIP from a lender. We have gone through a broker as high risk. The lender is asking us to pay a valuation fee of over £400 but they want it before we even put in the final submission of the mortgage application. Is this usual? It seems they could just reject the application and then we will have lost the valuation fee. 

propertyrental

well they are not going to approve your application until they see the Valuation.

But asking for the Valuation fee before you even apply seems premature. Are you sure they are not asking for the fee with the application?

Northernsoul123

It says this: Once case is ready for submission, a secure link will be provided for payment of  £440 valuation fee. This needs to be paid before case can be

submitted. Valuation is instructed at submission

Northernsoul123

I kind of would understand it if it was that they were offering a mortgage SUBJECT TO valuation. But they want paying before they are even letting us know we could have the mortgage. We got an agreement in principle but since then they have asked for a colossal amount of further information.

propertyrental

Northernsoul123 said:

It says this: Once case is ready for submission, a secure link will be provided for payment of  £440 valuation fee. This needs to be paid before case can be

submitted. Valuation is instructed at submission

I assume that's from your broker, not the bank/lender?

So the broker wants your £400 which they will pay to the bank along with submitting the application on your behalf.

Bank needs the £400 when you apply as they will then instruct surveyor to undertake Valuation.

Northernsoul123

No that was from the lender.

Northernsoul123

I guess from what you are saying this is normal then? I just would have thought they would have run through the financials to make sure I could even have a mortgage before taking fees for a valuation. If they look at my finances and just say no they have made themselves £440. Wouldn't it make sense to check everything then say so long as the valuation is ok we are happy to offer the mortgage?

eddddy

Northernsoul123 said:

We have an AIP from a lender. We have gone through a broker as high risk. The lender is asking us to pay a valuation fee of over £400 but they want it before we even put in the final submission of the mortgage application. Is this usual? It seems they could just reject the application and then we will have lost the valuation fee. 

There are 2 aspects to a mortgage application:

• Underwriting (Credit checks, checking bank statements, payslips etc)
• Valuation of the property

So you're saying that you'd like them to do the underwriting part first, and if you don't pass that, don't bother with the valuation (so you get your £400 back).

I'm no expert on this, but I think some mortgage lenders do that anyway - but others might do both parts in parallel.

I guess you can ask your mortgage adviser how your specific mortgage lender works - and maybe you can request that they don't book a valuation until the underwriting is done.

Obviously, that might slow the process down a bit.

Northernsoul123

That is a good idea. I will give it a try.

propertyrental

Northernsoul123 said:

..... I just would have thought they would have run through the financials to make sure I could even have a mortgage before taking fees for a valuation. ...

But they've done that, at least at a high level. You have an AIP from them.

I'm afraid you need to accept that throughout the buying process there are costs/fees to pay, which might be 'lost' if the mortgage and/or purchase falls through.

Your conveyancer when instructed, will ask for an amount upfront to cover the cost of searches, which might result in identification of issues or negative information which in turn might lose you the purchase.

As with the Valuation, you can't expect the conveyancer to undertake the searches before you pay for them......

Northernsoul123

Ok, thank you. I totally understand I would be paying for searches etc. but that would be after knowing the lender had offered me a mortgage. I think it is the fact that they have offered an AIP and then come out with a list as long as my arm of things they now want to look in to that has been making me feel the AIP was only the beginning of a very rigorous process which I might well not pass. To my mind it would make sense for them to at least check over the submission to see whether it seemed credible before taking payment for a valuation. But I guess that's how they make money and get the fee even if there is no valuation as they have said no to the applicant.