After weeks or months of house hunting, you’ve finally found the one. You have a home loan approval in hand and the purchase price is agreed upon, but you may have to wait for your lender to verify the value of the property through a mortgage survey. What is the purpose of a mortgage survey in Texas? Why is it often required when buying a home? Let’s find out!
Mortgage surveys vs. other property surveys
A mortgage survey is a type of property survey that is typically requested by insurance companies or lenders, not the homeowner. It is often required when you purchase a home because your mortgage lender has to be able to verify the property’s description. The lender needs to know that the home matches the legal documents and is acceptable as collateral for your particular mortgage loan. What does this mean? Well, it’s extremely important to the mortgage lender that the property you want the loan for is worth at least the amount of money you are borrowing.
When it comes to mortgage surveys, there are two main types: mortgage location surveys and mortgage inspection surveys. Here’s some more information about both.
Mortgage location surveys
Although a mortgage location survey sounds like the same thing as a boundary survey, it’s a bit different in that it is not used for construction or to determine boundaries. If your mortgage lender or title insurance company requests a mortgage location survey, they are looking for proof that certain home improvements are indeed located on the property, just like it is described in its legal description.
This type of survey identifies all the major buildings on your property, including the house, garage, sheds, workshop or other structures. It verifies that the property is not encroaching on easements or neighboring properties, and also determines whether neighboring properties are encroaching on your property.
Mortgage inspection surveys
While a mortgage location survey is full of details, a mortgage inspection survey usually only notes the structures that are on the property and their locations. It’s less detailed than a mortgage location survey, but is still important to lenders. Another thing about mortgage inspection surveys is that they often do not include boundary lines. Additionally, this is the type of survey your lender is likely to order when you purchase a home.
The requirements for mortgage surveys vary from state to state and oftentimes depend on the type of improvement you want to make or that will need to be made. Here’s an example: the state in which you’re buying a home in may require just a mortgage inspection survey, but to make improvements you’re required to get a detailed mortgage location survey per the requirements for obtaining a permit. Whether you’re after a mortgage loan or home equity loan to make improvements on your property, make sure to ask your lender what type of survey is being ordered for future reference.
If you are buying a home and need a mortgage survey in Texas, don’t hesitate to contact the knowledgeable team at D.G. Smyth & Company. Call us today!