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.
Valuation costs
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.
Read Homebuyers waste £1.3bn a year with the wrong survey.
Conveyancers guarantee costs too
Although Halifax is the first lender to offer a refund on this particular cost, other companies, such as solicitors and conveyancers, might guarantee even more.
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.
For example, movesure and easier2move will guarantee up to £500 in mortgage arrangement costs, £750 in valuation fees and £600 in solicitor’s fees, subject to terms and conditions.
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:
The true cost of a month's mortgage payment holiday
Average mortgage fee passes £1,500
Barclays to consider parents' income on mortgage applications
Most Recent
Comments
-
Ferdyg - You're obviously not the sharpest tool in the shed are you? At no point in the article does it mention that Halifax are great, the best deal around, or is the mortgage pushed due to this new feature. It states facts and explains to house buyers how these fees can still be applicable, even if your sale fails. What are they supposed to say? There's a mortgage company now offering a refund of your fees if your house sale falls through - but we can't tell you who it is, as it may sound like we're pushing it? It even states at the end of the article that while this can be a useful feature in a mortgage, it shouldn't be your deciding factor and that you should pick the most appropriate mortgage for you. Your own personal issues with Halifax clouding your judgement maybe? Lovemoney - thanks for the info. I'm not a huge fan of the Halifax personally, but it's a nice little addition to a mortgage product which first time buyers may find especially useful as it's an expensive enough process, let's hope other lenders jump on the bandwagon. We picked Newcastle Building Society for ours as they had a deal for free valuation and reduced home buyer survey costs, alongside a great rate and cashback. So hopefully if ours goes down the pan, we'll not be hugely out of pocket.
REPORT This comment has been reported. -
This article is just so rubbish it is unbelievable and, to boot, is obviously pushing Halifax. How much were they paid/offered sponsorship for this? Journalism where art thou? No investigation as to how much more it costs to go with Halifax to get this nor alternatives such as arranging this kind of deal with the vendor beforehand. Pathetic
REPORT This comment has been reported.
Do you want to comment on this article? You need to be signed in for this feature
18 July 2012