15 Oct 2022

What is a Mortgage Valuation?

Mortgage Valuation

Potential and existing borrowers researching the various aspects of a mortgage may come across mortgage valuations and not understand their purposes. Shortly, a mortgage valuation is a service completed by a professional for a written report of an individual property. 

Mortgage valuations have a very specific purpose: to allow a mortgage broker or lending specialist to complete a thorough investigation of a specific property to determine if it can be used as security or collateral for a mortgage agreement. Lenders complete mortgage valuations to verify that if a borrower for some reason faces a loss of their property the lending specialist is able to use the property’s valuation to cover the remaining amount of mortgage repayments still owed. 

During a mortgage valuation, the professional performing the services will check a variety of the property’s key components, including the following examples:

  • Any current planning restrictions
  • The physical location of the property being valued
  • The size and condition of any buildings residing on the property being valued
  • The property’s zoning restrictions
  • The structures of any buildings residing on the property being valued

A large majority of Australian lending specialists and mortgage brokers recommend a homeowner facing a mortgage valuation take various steps to ensure they are adequately prepared, including a deep clean of any buildings on the property undergoing valuation to frame the property in the best light possible. 

If you have any additional questions or concerns regarding mortgage and property valuations, we recommend reaching out to your current mortgage broker to learn of any rules and regulations they may have in place.

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