When you’re looking into some properties, you might find it beneficial to get financing for your purchase. Lenders like banks and credit unions provide mortgages to help homebuyers. As part of the financing process, lenders might require you to undertake a mortgage survey. This helps them guarantee that the property you are purchasing has enough value to cover the loan amount.
In this blog, we will delve into the reasons why lenders require mortgage surveys. Learn how a land survey can prevent costly mistakes and legal disputes from happening in the future.
What is a mortgage survey?
This is a type of land survey that’s required for obtaining a mortgage for a property. In order to get a mortgage, your property needs to undergo a basic valuation survey. Mortgage surveys are typically conducted by a licensed surveyor who is experienced with survey work and various tools.
The main purpose of a mortgage survey is to provide detailed information about the property. This description of the boundaries and potential encroachments affecting the property’s value. Lenders utilize the survey results to assess if a property is worth the asking price before they approve the mortgage. Ultimately, mortgage surveys allow lenders to make informed decisions about whether the property is suitable for financing.
Who benefits from getting a mortgage survey?
Mortgage surveys are often conducted to protect the lender’s best interests. It’s a way for them to verify that the property is worth at least as much as what’s being borrowed. Without the help of a mortgage surveyor, they won’t be able to protect their investment if the borrower is unable to repay the loan.
Although lenders benefit more from a mortgage survey, buyers can also gain something valuable from it. The information from the survey will help them make informed decisions about the purchase. If potential issues arise, the buyer can have the opportunity to renegotiate the price and get a better deal. Here are the other benefits that buyers can gain from obtaining a mortgage survey:
- Provide an estimated property valuation
- Identify property boundaries
- Reveal any encroachments or easements
- Avoid disputes with neighbors
- Ensure compliance with local laws and regulations
- Gain peace of mind
Common Types of Mortgage Surveys
Basic Valuation or Mortgage Valuation
This focuses on the assessment of the property’s market value. A qualified surveyor or valuer will inspect the property and confirm if it’s worth enough to cover the amount of the mortgage loan. While it’s commonly carried out by a professional surveyor, a mortgage valuation is less thorough than a land survey. If some issues with the property are identified, your mortgage application may be denied by the lender.
Mortgage Location Surveys
Like basic valuation, a mortgage location survey is usually commissioned by a lender or title insurance company. This is intended to identify improvements on the property and ensure that they are accurately described in legal documents. Since it’s used to assess the risk associated with the loan, this survey will look for encroachments from neighboring properties. It also gives you a good picture of the utility easements and rights-of-ways.
However, keep in mind that mortgage location surveys are different from boundary surveys. It’s not used to mark corner lines or determine the exact boundaries of the property.
Mortgage Inspection Report
Basically, a mortgage inspection report provides information about the property’s physical condition. The professional surveyor will visit the site and inspect the interior and exterior of the property. Aside from this, they will look into the structural and environmental conditions that could impact the market value.
A mortgage inspection report is also used to identify any potential issues or defects. The lender may use this report to determine the amount of the mortgage loan and determine the necessary repairs needed.
Request a Quote from Our Surveyors
If you’re seeking a mortgage loan, Pittsburgh Land Surveyors can help you with all your surveying needs. We specialize in a full range of surveying services, including construction surveys, as-built surveys, FEMA elevation certificates, and ALTA surveys.
As a top-rated land surveying company, we pride ourselves on our excellent customer service and professionalism. Our team uses the most up-to-date equipment and technology to complete projects on time and within budget. Give us a call today to learn more. We are happy to answer all questions about your project!
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