Getting a mortgage for your dream home can be a challenging process, and one of the most significant hurdles is the property valuation. Property valuations are essential in determining the value of the property you want to buy, and they help mortgage lenders decide how much money they are willing to lend you. However, the good news is that mortgage lenders are relaxing their rules on valuations for mortgage applications, making it easier for home buyers to secure a mortgage.
What are mortgage valuations?
A mortgage valuation is an assessment of a property’s value carried out by a chartered surveyor or a valuer appointed by your mortgage lender. The valuation report provides an estimate of the property’s market value and helps the lender decide how much they are willing to lend you. The report also includes details of the property’s condition, location, and other relevant factors that may affect its value.
The impact of relaxed valuation rules on mortgage applications
Relaxing the rules on valuations for mortgage applications means that lenders are now placing less emphasis on the physical inspection of a property. Instead, they are relying more on desktop valuations, which use data and analytics to estimate a property’s value. This change has been driven by the COVID-19 pandemic, which has made it difficult to carry out physical valuations due to social distancing measures and other restrictions.
By relying on desktop valuations, lenders can make faster decisions on mortgage applications, reducing the time it takes to get a mortgage offer. This is good news for home buyers, as it means they can secure a mortgage more quickly and move into their new home sooner.
The benefits of relaxed valuation rules
Relaxing the rules on valuations for mortgage applications has several benefits for home buyers. Firstly, it means that people who may have struggled to get a mortgage in the past due to a low valuation can now be considered for a mortgage. This is because desktop valuations are less reliant on physical inspections and can provide a more accurate estimate of a property’s value based on data and analytics.
Secondly, it means that home buyers can now secure a mortgage more quickly, reducing the stress and uncertainty associated with the home buying process. This is particularly important in a competitive housing market where properties can be sold quickly, and buyers need to act fast to secure their dream home.
What to consider when applying for a mortgage
While relaxed valuation rules are good news for home buyers, it is still important to consider other factors when applying for a mortgage. One of the most critical factors is your credit score, as this will determine whether you are eligible for a mortgage and how much you can borrow. It is also important to consider your income and outgoings, as lenders will want to ensure that you can afford to repay the mortgage.
Other factors to consider include the type of mortgage you want, the interest rate, and the length of the mortgage term. It is essential to do your research and speak to a mortgage advisor to ensure that you are getting the best deal for your circumstances.
Conclusion
Relaxing the rules on valuations for mortgage applications is good news for home buyers, as it means they can secure a mortgage more quickly and easily. By relying on desktop valuations, lenders can make faster decisions on mortgage applications, reducing the time it takes to get a mortgage offer. However, it is still important to consider other factors when applying for a mortgage, such as your credit score, income, and outgoings. By doing your research and speaking to a mortgage advisor, you can ensure that you are getting the best deal for your circumstances.