Mortgage survey: title and location survey for closing

When a lender or title company asks for "a survey" at closing, they usually mean one of a few different products, and they cost very different amounts. The cheapest is the mortgage survey, sometimes called a mortgage location survey, mortgage inspection or simply a location survey. A licensed surveyor plots the house, garage, driveway and fences relative to the boundary lines as taken from the recorded deed, and hands the lender and title insurer a drawing that shows nothing is obviously over a line or an easement.

The key thing to understand: a mortgage survey is deliberately not a boundary survey. On a mortgage or location survey the surveyor does not independently determine the boundary and does not set or recover the corner monuments. The lines come from the paper record, not from field-verified corners. That is why it is cheaper, and why several states require it to be labeled so it cannot be mistaken for a boundary survey. Ohio, for example, codifies the mortgage location survey as a professional opinion for the lender and title insurer in which "boundary lines are not determined," and Oklahoma requires the document to be prominently marked as a mortgage inspection report. Colorado uses an Improvement Location Certificate for the same purpose, again expressly not a boundary survey.

So if your goal is to build a fence, settle a dispute or know exactly where your corners are, a mortgage survey will not do the job. For that you need a boundary survey, where the surveyor field-determines the lines and monuments the corners.

Often, no new survey is required. Whether you need one usually comes down to the title policy's "survey exception." If the title company has not reviewed and accepted a current survey, it lists a survey exception on the policy, which leaves boundary and encroachment matters uninsured. A survey the title company accepts lets it delete or narrow that exception, which is what lenders and investors want. That acceptable survey can be a brand-new one, or an existing survey paired with an affidavit from the seller that nothing has changed.

Texas is the clearest example. A seller can supply an existing survey plus a notarized T-47 Residential Real Property Affidavit swearing no fence, pool or addition has been built since the survey was made. If the title company accepts them, the buyer pays for no new survey. If the seller cannot produce a survey or the affidavit is rejected, a new one goes back on the closing table. Many title underwriters also waive the survey requirement entirely for one-to-four family homes in a platted subdivision up to a value cap, though that does not apply to acreage, new construction, or commercial deals.

The takeaway: ask early in the deal whether the seller has an existing survey and will sign an affidavit. If not, order a survey in parallel with the rest of closing rather than three days before, when rush fees start.