Is Spray Foam Insulation a Problem for Mortgages?
Two years ago, my daughter took out a mortgage with a fixed rate of 3.05%. As the end of the deal approaches, we are concerned about a problem we discovered when we wanted to make our home more energy-efficient. The company we hired to install solar panels and wall insulation refused to do the work because we have spray foam insulation in the loft. This could make it difficult for us to sell or remortgage the property. We have read online that the only solution is to remove the spray foam, which is costly. What do you suggest?
When taking out a mortgage, satisfying the lender involves two elements. First, the borrower must meet the lender’s requirements. Second, the lender wants to ensure that the property is a suitable security for the mortgage. This means that the property’s value matches the purchase price and that its structure and condition are in good order. A valuation is conducted to provide the lender with assurance that they can sell the property and pay off the mortgage if necessary.
Not all valuations are equal, and a basic valuation ordered by the lender is not designed to protect the buyer’s interests. It may not even involve a physical inspection of the property. Therefore, it is advisable for the buyer to commission a more in-depth report, such as a home buyer’s report or a full structural survey.
Spray foam insulation can potentially cause problems for a property if it traps condensation in the roof space. This can lead to roof timbers rotting if the roof cannot properly breathe. Some lenders may be hesitant to lend on properties with spray foam insulation, especially if the timbers have been completely encapsulated. However, not all lenders would rule out lending in this situation. They would want the valuer to assess the application of the foam and its impact on the roof’s structural integrity.
For your daughter’s remortgage, it may not be an issue if the application does not ask about spray foam, or if there is no physical valuation. Alternatively, she could switch rates with her existing lender, which would not require a valuation. However, it is likely to become an issue if she decides to sell the property. It is important to review the original valuation and determine whether it recognized the presence of foam. Contacting the surveyor who conducted the valuation may also be helpful. Consider carrying out investigative work to ensure that the foam is not negatively affecting the roof structure. The Royal Institution of Chartered Surveyors (Rics) has a consumer guide that provides more information on spray foam insulation.
If you have any questions about mortgages, feel free to email me at [email protected]. Please provide as many details as possible. I will do my best to answer your questions in a forthcoming column.
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