The mortgage industry quite often refers to zero term or nil valuation mortgages, but these terms can be confusing, as all property will have at least some value. And if you receive a nil valuation result on your property, it certainly doesn’t mean that it has no worth on the market.
When you consider all you need to know about house surveys, it’s worth remembering that lenders tend to use automated systems to process mortgages, and they build in checks to ensure that mortgages aren’t automatically processed if they need further review.
Different Criteria for Different Lenders
Particularly in the current economic climate, lenders will want to review a mortgage application for a variety of reasons, and so the ‘zero’ valuation is simply a check that is entered into the valuation report so that the lender can look closely at the detail.
So when weighing up all you need to know about house surveys, remember that the nil value could just as easily be ‘n/a’ or a ‘X’ to simply flag the extra attention element to your lender.
The property may not have automatically met the lender’s requirements for a variety of reasons. It might have certain characteristics that aren’t necessarily covered by a standard mortgage, and the surveyor may need to gather extra information before he or she can complete their valuation.
Do You Know All You Need to Know About House Surveys?
Valuers will follow specific guidance laid down by each lender, and each lender will have their own criteria. As an example, some require the surveyor to assess the loft and others do not.
The lender will also rely on the valuer to pick up on any issues that could result in a safety risk or issues which could make the property hard to sell in the future. Examples of this are fire hazards, poor cladding or location problems which lead to social issues. Even issues such as Japanese knotweed in the garden can be viewed as a problem.
All of these instances could trigger the zero valuation, which will tell the lender that it needs to ask for more information before it makes a decision on offering a mortgage on the property. If your property receives this kind of valuation, talk to the lender to find out more about what they need to know.
