Mortgage Valuation

Where do you work?

I work in the mortgage valuation department. For the benefit of friends who want to know more, I shall elaborate. 

What is Mortgage Valuation?

When a buyer is interested in buying a property, he will need to approach the bank for a mortgage. Because property transactions are capital intensive, buyers typically only put up 20-40% equity (depending on your credit rating), borrowing the remainder from the bank. 

When the buyer applies for a mortgage, the bank will commission a property valuation firm to conduct a mortgage valuation. The report is used to establish whether the property is worth the value that the buyer is proposing to buy it for. The bank requires it to protect itself in the event that the borrower defaults, i.e. fails to pay up. Should the borrower default, the bank will have to sell the property, and they need to know that if they do sell the property the proceeds can cover the loan. 

Here you might ask, why doesn't the bank just hold onto the property for capital appreciation, while renting it out to derive income in the meantime? The short answer to that is that banks prefer to focus on their core business of banking, not property investment.

Working Life

Come another five days will officially mark the second month since I've been deemed by societal standards to be 'gainfully employed'. More specifically, I'm working in a local property consultancy, in the property valuation department.

If I should have to sum up the past two months of on-the-job training with one word, no word can describe the experience better than 'intense'. Work commitments have been clawing at my personal time. I've fought back valiantly. While I've won a few battles, it seems like the war is going work's way. Training plans are thrown into disarray at a moments' notice, whether is it by a owner insisting on an appointment at 9pm or the over zealous agent asking for a weekend session. 

The upside is that I've really been learning a lot regarding what makes a property worth its valuation, as well as seeing the various types of furnishes and fittings in residential developments. To some extent, I can roughly gauge the price a selected property can fetch on the open market off the back of my head now. The downside is that my climbing standard has dropped drastically, leaving me feeling disenchanted. I also get barely enough sleep. As usual, I've been driving myself hard. I hope my body holds up. If past trends can be any gauge at all, I might just faint again.