Is A Valuation A Good Sign That A Mortgage is Approved?

By Kristian Derrick

Last Reviewed: 8th February 2024

If you are a first-time buyer, the mortgage process may be all new to you.

The terminology, order of events and approval stages may all be confusing at first.

This guide will help to clarify the stages, focusing on the property valuation including whether or not a valuation results in a mortgage approval.

What is a Property Valuation?

Firstly, let’s explore what a property valuation is, and at which stage a valuation is undertaken.

Following a mortgage application, the initial first checks are undertaken on the applicant’s backgrounds and current financial position in order for the lender to offer an agreement in principle.

This is a document confirming that the lender will provisionally lend a set amount of money for a mortgage providing that further checks, which may include a property valuation are completed and are satisfactory to the lender.

An agreement in principle is typically valid for 30 or 90- days from the date of being obtained, and therefore the remaining elements of the application process and further legal steps are to be concluded during this timeframe.

In some circumstances, an extension to the timeframe may be requested, however, the lender will consider the circumstances on a case-by-case basis, and therefore an extension is not guaranteed.

A property valuation or valuation survey is the process undertaken via approved surveyors, authorised by the lender to report back on the property’s current condition and value, in order to proceed with a mortgage.

Traditionally a surveyor would visit the proposed property that the mortgage applicant would like to purchase to undertake the survey, however sometimes these days, surveyors can rely on information found online in order to compile their assessment of the property, depending on the directions of the lender.

Some lenders will charge for the service of a property valuation to be undertaken, whilst others offer free valuations in order to process mortgage applications therefore charges differ between lenders.

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Does a Property Valuation Mean a Mortgage Application is Approved?

There are a number of situations that can result in a mortgage application being declined even once a property valuation has been undertaken, as follows:

  •  The property’s condition – Should the surveyor report back to the lender that the property is in a condition that does not meet the criteria of the lender, this could affect the lending decision. The lending criteria can vary between lenders, however, if the property is not habitable in its current position or has structural problems, most lenders will not offer a standard mortgage against it. Should this situation arise, there may be other options to obtaining the funds such as development finance.
  • The property’s value – Should the value of the property change from the original estimates, the loan to value ratio in relation to a mortgage is also likely to alter. The loan to value is the ratio between the property value and the deposit or equity held and this affects the interest rate applicable.
  • The applicant – Lenders may still be completing various checks on the mortgage applicants during the same timeframe that a property valuation has been requested and therefore if something is found during the checks that do not meet the lending criteria, the mortgage application could still be declined. Examples include:
    • An applicant fail additional financial affordability checks
    • Details of a previous County Court Judgement are found, or any dishonesty of fraudulent claims are discovered.
    • Personal circumstances change since the application was made such as the applicant is made redundant
    • Insufficient duration of self-employed income
    • Concerns involving the applicant’s rights to live in the UK

How Long does it take to Obtain a Mortgage Offer Following a Property Valuation Taking Place?

As the agreement in principle is likely only to be based on the income of the applicant(s) and the credit score(s). Further background checks of the applicant(s) and the property valuation usually follow this initial step.

The timeframe of the property valuation will vary depending on whether the surveyor visits the property or if the process is undertaken using online resources.

Should a surveyor visit the property and prepare a report following this, the valuation will usually take a few days depending on how busy the surveying practice is.

Whereas a desktop report could be undertaken and returned within a few hours. You can pay for an alternative type of valuation should a more in-depth valuation be required.

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Using a Mortgage Broker

Mortgage applicants that use a mortgage broker often find that specific, tailored advice is provided before a mortgage application is submitted, ensuring that the financial products considered are the most appropriate to them.

Brokers are able to search the market and therefore have access to a wide range of financial products and different lenders, to be able to compare mortgage terms for applicants.

Once an application is submitted to the chosen lender, the brokers remain on hand throughout the process to ensure that queries are handled promptly, and that completion takes place as soon and as smoothly as possible.

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Does a Valuation Mean that a Mortgage is Approved Summary

A property valuation takes place during a mortgage application to ensure that the condition and value of the property are as expected and meets the lender’s mortgage criteria.

Surveyors are instructed to undertake property valuations either via an in-person visit to the property or by using online resources to create a report which is sent to the lender to review.

Unfortunately, even when a property valuation is submitted, this does not guarantee that a mortgage will be approved as the lender will need to review the details of the report.

They will ensure that the property condition and value meet the lending criteria, whilst continuing with the underwriting process including further checks on the mortgage applicants.

Please feel free to get in touch with our friendly team of advisors to book an initial consultation to discuss the options available to you.

Call us today on 01925 906 210 or feel free to contact us. One of our advisors will be happy to talk through all of your options with you.

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