In this brief guide, we will discuss the question “does valuation mean a mortgage is approved?”

Does valuation mean a mortgage is approved?

The short answer is No. A mortgage valuation does not mean a mortgage has been approved and to be safe and keep your options open you shouldn’t take a mortgage valuation as a sign that the mortgage application has been approved.

Some mortgage lenders will conduct mortgage valuations before the approve a mortgage to ensure that the property that they want to lend on can be used as suitable security. 

If a mortgage lender carries out a mortgage valuaton prior to approving a mortgage (hence providing you with a mortgage offer) and realised that the property is of non-standard construction or that they do not lend on this type of property then they could withdraw their mortgage offer if they have already made one or not make one at all.

A mortgage valuation doesn’t necessarily mean a  mortgage is approved as it isn’t necessarily the last stage of the mortgage application process. In fact, the last stage of the mortgage application process from the mortgage lenders point of view is the transfer of funds to your conveyancer who then sends these funds to your mortgage lender

One of the last stages of the mortgage application process would be the exchange of contracts, at this point you can be assured that your mortgage is almost complete but until you have completed on the mortgage the mortgage lender can still withdraw its mortgage offer. 

To ensure you are never in a position where it is likely that the mortgage lender will withdraw their mortgage offer you may want to use a mortgage broker who has experience of dealing with mortgage lenders and providing them with the information they need so you can get a firm mortgage offer and complete on your mortgage in suitable time.

In summary, a valuation does not mean a mortgage is approved. Regardless of if it is done before or after a mortgage offer is received. It is simply just a part of the mortgage process and mortgage lenders can work indifferent ways so it is better not to take this as a sign of any real progress.

How long does it take to get a mortgage offer after a valuation?

You could get a mortgage offer within minutes after a valuation has been carried out depending on if it was a desktop valuation or an onsite valuation. An on-site valuation could mean you get a mortgage offer within a few days. A desktop valuation could mean you could get a mortgage offer within hours.

Can a mortgage be refused after valuation?

Yes, a lender may decline a mortgage after a valuation if the value you indicated on your mortgage in principle was far below or above the property’s true value. A lender may have a loan to value range which is part of its lending criteria and could decline your mortgage after a valuation if it doesn’t fit its criteria.

Using a mortgage broker

You may want to consider using an independent mortgage broker to get your mortgage. 

Mortgage brokers are important as they can access single person mortgage products from across the whole of the market in some cases. This could be over 11,000 mortgage products. This may have some advantages than going directly to a mortgage lender.

A mortgage broker will look to understand your financial circumstances and then provide recommendations on which single person mortgage products may be suitable for you.

After giving you these mortgage recommendations, most mortgage brokers will seek your consent to apply for a mortgage in principle

This will allow you to shop for your home easier as more estate agents and sellers may take you seriously or it will give you confidence that your remortgage is indeed a possibility before you make a full mortgage application. 

Once you have found a home you want to buy or are satisfied with the mortgage offer for your remortgage then the mortgage broker will then look to get you a mortgage offer.

This will come with a key facts illustration document which details out the features of your mortgage including how much you will pay per month if there are any limits such as early repayment fees, or annual overpayment limits.

If you are happy with everything you can then go on to secure your mortgage with the help of a conveyancer

Your conveyancer will manage the legal searches on the property to ensure there aren’t any issues with it, they will oversee the sales agreement to ensure it is in your best interest, they will manage the transfer of mortgage funds, exchange contracts with the seller or their conveyancer and set a completion date with the seller or their conveyancer.

In this brief guide, we discussed the question “does valuation mean mortgage is approved?”. If you have any questions or comments please let us know below.