When you purchase a home, your lender wants to know exactly what you are paying for and what it is lending the institution's money for. This is why you have a survey fee on your closing documents. A survey is required by most mortgage lenders. It may or may not include a drawing. The amount of detail that is required on a mortgage survey is regulated by the states.
What Is a Survey?
A survey is a drawing that can show a variety of characteristics of your property, including topographical features such as trees, creeks or hills, depending on the level of detail you need. Property surveys for real estate transactions can show property lines, easements and encroachments on the property of others, and major improvements. Depending on your state's requirements, a mortgage survey could show all of the above, or it could show just the property lines and the buildings, natural landmarks and required setbacks for the property.
Types of Mortgage Surveys
There are two types of mortgage surveys — a mortgage location survey and a mortgage inspection survey. Mortgage location surveys are used by mortgage and title companies to determine which major buildings are on your land — such as a garage, house or shed — and also note whether your property is free of encroachments on a neighbor's property; a neighbor encroaching on your property; or an encroachment into a recorded easement. Mortgage inspection surveys have less detail. Many don't include boundary lines and merely note structures and their locations. The mortgage inspection survey is typically what you get when you purchase a home.
It pays to know the regulations in your state if you are planning to purchase property. If all your state requires is a mortgage inspection survey, depending on the type of improvement you are making, you may have to order a different survey in order to satisfy permit requirements. Ask your lender what type of survey is being ordered so you know what to do when you decide to put your personal touches on your property.
Impact of Differences
If you live in a state that requires the survey to include property lines, easements, encroachments and true property corners, you can use this survey to erect fences, obtain building permits and resolve property disputes. If all you have is a mortgage inspection survey, you will have to get a plot-plan survey or a boundary survey if you want to make improvements on the property later. Which survey you would need is governed by your municipality's building permit requirements.
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