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Property Hawk
BTL mortgage problems with a surveyor - landlord advice on valuations

One of the key parts and most nerve racking aspects of a landlord obtaining a buy-to-let mortgage is the valuation process.  This is when the surveyor is instructed by a landlord’s prospective buy-to-let lender to value the residential investment property. 

The inspection by the Chartered surveyor is carried out for the building society, bank or other type of mortgage lender and is often known as the mortgage survey.

It isn’t really a survey in the true sense of the word.  It is more a very brief inspection of the residential investment property to allow a surveyor to be able to advise the mortgage lender that the actual value of the buy-to-let property accords with the one stated in the mortgage application. 

A landlord applying for a buy-to-let mortgage will often have to pay for the cost of the inspection, despite the fact that the surveyor is actually acting for the mortage lender not the landlord. The surveyor is not really interested in reporting defects that do not affect the value to a significant extent and therefore does not look for latent defects.

Once completed, it is normal for the mortage lender to provide a copy of the valuation report to the landlord / borrower. This report, whilst of interest to the landlord, will not contain sufficient information for an intending purchaser to form a view as to whether the investment property is a good proposition for purchase. 

In the case of a buy-to-let property, the surveyor will also carry out a rental assessment to ascertain what the projected rental income is for the residential investment property.

One of the problems that can a rise for a landlord is if the surveyor values the residential investment property at less than the proposed purchase price, or below what the landlord estimated the residential investment property to be worth. 

The outcome for a landlord seeking the maximum loan to value (LTV) is that the mortgae lender is likely to reduce the amount of money they will advance. 

This will mean that the landlord will need to either; renegotiate the purchase price with the vendor, put in more of their own equity, or try to source another mortgage lender who is {{ LINK MortgageAdvice.aspx?Id=197 prepared to lend on a higher LTV. }}
 
Landlords that are looking to purchase an older buy-to-let property are always advised to obtain at least a homebuyers survey to ensure that there are no major structural defects to their proposed residential investment.

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