Beware the “free” valuation
We are all taught to be wary of people offering us a free lunch, and why would this not be the case with a mortgage and the valuation.
Currently there are a number of lenders who are trying to tempt us with a “free” valuation service. However, we should be careful, these free valuations are often only for the lender, in most cases you would not even receive a copy of the report.
What this means is that you have no comeback against the valuer or surveyor who did the work.
Traditionally, when you purchased a house the lender would make you obtain a valuation, you could always buy a basic valuation or upgrade to a full homebuyers report or a structural survey. The surveyor would view the property, check for damp, movement and any problems such as wiring issues etc. You could then decided whether you wanted to continue with the sale, may be you could negotiate with the vender, but at least if you did go ahead you knew or had some sense of surety that you knew what was wrong with the house, even if you picked the basic valuation.
If something was found to be wrong with the house that the valuation should have picked up, you would be able to take the surveyor to task.
Not so with a free valuation: the free valuation is not instructed on your behalf, they are instructed on behalf of the lender and as such you would have no come back at all.
All the lenders do offer an enhanced valuation package, that is those that offer a “free” valuation, and therefore it would be wise to select that option. However, these cost about the same as a standard valuation offered by other non free valuation lenders. What this really shows is that the lender who says “free” valuation, is not really offering a cheeper deal, because when you add in the cost of a real survey there is little difference in cost.
Another cheeky thing these same “free” valuation lenders, will do is add a little to their arrangement fees. They can get away with this if the valuation is free, and still appear cheeper than the non free valuation deals, but when you add back in the cost of a real survey you now notice that they are in fact more expensive.
All this said, we live in a world of cheapest is best, and not many people scratch the surface to look a little deeper, so its unlikely that free valuations will disappear and its even more unlikely that people will not be attracted to them.
Your home may be at risk if you fail to maintain repayments on any debt or mortgage secured against it.
PN Dales is authorized and regulated by the Financial services authority 496107.
For more advice on mortgages or other areas of your financial planing why not have a look at our web site www.pndales.co.uk or email firstname.lastname@example.org