What Is a Survey Fee on a Mortgage?

A survey fee on a mortgage is a charge for a professional land survey. This expense is part of the closing costs during a home purchase. The fee covers the work of a licensed surveyor to map property boundaries and features. Understanding this fee is important for homebuyers.

Purpose of a Mortgage Survey

A land survey is often required for a mortgage, benefiting both the lender and homebuyer. For lenders, the survey confirms property boundaries and ensures the loan’s collateral is accurately described. It protects their investment by verifying the property matches its legal description and identifying issues that could affect its value or marketability. Lenders also rely on surveys to prevent undisclosed encroachments or property line disputes that could complicate future ownership or sale.

For homebuyers, a land survey provides important information and protection. It clearly defines property lines, allowing buyers to understand precisely what they are purchasing. A survey can reveal potential disputes with neighbors, such as a fence or structure that extends onto the property, or vice versa. It also uncovers easements, which are legal rights allowing another party to use a portion of the property for a specific purpose, such as utility access or shared driveways. Identifying these elements before closing can prevent future legal or financial complications.

Key Elements of a Survey

A professional land survey provides detailed documentation of a property’s characteristics. The survey maps property boundaries and their dimensions, confirming the legal description of the land. It also indicates the location of all existing structures on the property, including the main house, garages, sheds, and other outbuildings.

Beyond structures, a survey identifies physical features such as fences, driveways, and retaining walls. The survey identifies easements and rights-of-way that may affect the property, which can include utility easements for power lines or water pipes, or access easements for neighboring properties. It also reveals any encroachments, which occur when a structure from an adjacent property extends onto the subject property, or vice versa. It confirms adherence to local zoning laws.

Survey Fee Considerations

The cost of a land survey can vary, typically ranging from a few hundred dollars to several thousand, depending on various factors. Property size is a primary determinant, with larger parcels generally incurring higher survey costs compared to smaller residential lots. The complexity of the terrain, such as heavily wooded areas or uneven landscapes, can also increase the time and effort required, thereby raising the fee.

Property location, whether in an urban, suburban, or rural setting, also influences the cost due to differing market rates for surveying services. Additionally, the specific type of survey needed, such as a basic mortgage survey versus a more comprehensive American Land Title Association (ALTA) survey, affects the price. While there is no universal rule, the buyer typically pays the survey fee as part of their closing costs, as the survey primarily benefits them and their lender. However, this fee can be negotiated between the buyer and seller during the real estate transaction.

When a Survey May Be Waived

In certain situations, a mortgage lender might waive the requirement for a new land survey, although this does not eliminate the buyer’s potential need for one. This can occur during mortgage refinancing, especially if a recent survey is on file and the property has not undergone significant changes. Lenders might also waive a new survey if the property is in a well-established subdivision with readily available, recent survey records that meet their criteria.

Some title insurance policies may offer coverage for survey-related issues, which can sometimes lead lenders to waive the survey requirement. Even when a lender waives the need for a new survey, a homebuyer may still elect to obtain one independently. This provides an added layer of protection by confirming property boundaries and identifying any potential issues not covered by a lender’s limited scope or title insurance, helping to avoid future disputes.