This is a common concern of consumers as well as the lenders to check if any property is mortgageable or not. It literally means if a property has enough worth that it can easily be mortgaged or not.
Lenders do not just give a mortgage loan to someone outright unless that person or company is doing really well financially. They all have certain criteria which they use to approve or disapprove a mortgage application.
The things that lenders usually look into are the applicant’s income level, employment status, how they are going to make the mortgage payments, credit standing of the applicant, how much deposit can be made by the applicant and property’s value in the market.
Commonly the mortgage lending institutions are concerned with these characteristics and do not focus too much on whether a property is mortgageable or not because it is safe to assume that all properties are mortgageable.
People are purchasing properties all the time.
They are even purchasing properties that may seem to be a really poor condition or maybe bought through an auction. In fact, most smart individuals or companies are often on the look to find properties whose worth could be increased by a little revamp or fixing.
Therefore, if you see a property in poor condition do not turn away because it might become a very fruitful investment in the future. Although you may need to spend a bit of money to refurbish the property later on it could become really worthy financially and then you may sell it off for a bigger profit.
Nevertheless, the most important concern is to ensure that the property acts as a worthy security for the lender so that they can provide you the mortgage loan without worrying about what would happen in case of non-repayment. Properties that are considered run-down or non-standard construction may not be considered by the lenders at all.
If you have purchased any property through an auction, always be prepared for the risk it involves because although you would have signed the deal with the owner but all properties are first evaluated through a valuation survey by the lending institutions.
The report derived from the survey helps the lender in knowing whether the property serves as a security or not. Lenders are specific about the properties which are owned through auctions. If the property is amongst the non-standard construction then lenders are likely to refuse to give the loan for that.
The policies made on the construction type of the property is simply non-negotiable for the lenders and there is not much which can be done.
Moreover, the surveyor might only provide the lender with a survey report that tells the value of the property without giving complete details, it does not mean that the lender does not have the authority to refuse giving loan for it even after the report. If there are any serious damages on the property mainly structural in nature then the lender can decline the loan application.
In order to protect yourself from getting a property that might not do you any good in future, it will be feasible for you to get an independent survey of your property from an experienced surveyor.
This will help you in removing all your doubts and making a sound decision. In addition to that, the report will help you to be prepared in advance before reaching the lenders and fetching the best deal from them.
An independent survey is likely to give you an idea of the issues that the property is suffering from and how they can be fixed conveniently.