Halifax to refund valuation fees for failed house purchases
Halifax has promised to refund valuation fees to applicants if their property purchase falls through. But there are strings attached...
Halifax has promised to refund the cost of a property valuation to mortgage applicants if the deal collapses.
In order to claim a refund worth hundreds of pounds, the collapse of the deal must be through no fault of the buyer. The applicant must also go on to complete on another property with the lender, at which point the costs will eventually be refunded.
Halifax is the first lender to make this pledge, which applies to all mortgage customers applying for any deal directly or through a broker.
This offer comes hot on the heels of Halifax offering to pay half of borrower’s Stamp Duty bills.
A valuation is one of numerous expenses buyers face when purchasing property and as you might have guessed it isn’t cheap.
Prices differ depending on what type of valuation you get and which company you use, but typically it can cost anywhere from £300 for a basic valuation to over £1,000 for a more detailed survey.
There are three different levels to choose from: a basic valuation, a HomeBuyer’s Report and a full structural building survey, which is the most expensive.
The difference between a valuation and a survey
A valuation is purely for the benefit of the lender and is the minimum requirement to ensure you’re not borrowing more than the property is worth. The HomeBuyer’s Report is a valuation and survey that provides more detail in a user-friendly document and assesses any potential repairs and defects.
A full structural survey is the most comprehensive option - recommended for older buildings, properties built from unusual materials or any other type of unconventional home. The report will detail any significant defects, structural issues and even minor faults.
Conveyancers guarantee costs too
When you buy a home you’re likely to instruct a conveyancer to manage the legal side of property purchases. This could be a solicitor specialising in this area or a licensed conveyancer.
Some will refund valuation fees as standard if - through no fault of your own - the purchase fails. They could also refund mortgage arrangement fees and solicitor’s disbursement costs, which include search and land registry fees.
Reasons why you might need a refund
Even if you’re geared up to complete and are ready to move in to your new home, there’s nothing you can do to stop the vendor from having a change of heart. If the house is taken off the market, even though you still want to buy, it would ordinarily mean money wasted because valuation fees are usually non-refundable.
Alternatively, the valuation could reveal that the property is in need of repair work and is therefore worth much less than what you offered to pay the current owner.
You would therefore be granted a lower mortgage based on the property’s true value. If the vendor refuses to drop the price any lower, the sale could belly-flop.
Find the right mortgage
Help with the cost of buying (or not buying as the case may be) is useful, but it shouldn’t be the sole deciding factor for getting one mortgage over another. Make sure you apply for a home loan that’s right for you and compare mortgage deals.
More on borrowing: