What You Should Know About Mortgage Inspection Plans

We sat down with Scott Ludwig from Great Northern Survey, a Registered Professional Land Surveyor, to discuss the ins and outs of Mortgage Inspection Plans.

Mortgage Inspection Plans, commonly known as "Plot Plans", are required by most Lenders prior to closing on a home.  The banks and Title Insurance Companies want reassurance  that there aren't obvious encroachments and to know whether or not the subject property is in a flood plain and would require flood insurance. 

According to Ludwig, one problem is that most people use the term plot plan interchangeably between Mortgage Inspection Plans and Certified Plot Plans when they are two completely different things with different purposes. 

A Mortgage Inspection Plan certifies to the Lender that there are no encroachments.  Some of the information on this type of plan will include the square footage of the property, a description of the current deed or plan, general dimensions of the lot, general shape of the lot, and the building and structures that may be found on the lot.  The way this information is gathered is through general research, a visual inspection of the property and the use of measuring tapes. 

To the untrained eye, a Mortgage Inspection Plan may seem to define the property's boundaries.  However the intent is not to represent the accuracy of the property lines and they cannot be used to determine boundary lines.  These plans also cannot be used to pull permits for additions or fences, which is a common mistake.  It is simply an approximation of a lot's description.

In order to know a property's true boundaries, a Land Surveyor must prepare a Certified Plot Plan, which is the resulting plan from a complete boundary survey.  According to Ludwig, this is a very precise depiction of property lines and exact locations derived from extensive research, precise measurements using surveying equipment, mathematical equations and applying legal principles of boundary location.  Control is found out in the field from established record monuments and control points which are then used to tie in the subject property's boundary points.

So, for closing purposes, a Mortgage Inspection Plan is a perfectly adequate way of establishing potential issues with a property.  If you want a more accurate picture of a property, want to put on an addition, a bigger driveway, put up a fence or install a swimming pool, or need to resolve a boundary dispute with your neighbor, then you will need to get a Certified Plot Plan. 

Hopefully, this helps clear things up a bit!  If you have further questions, feel free to comment below or you can reach Scott Ludwig at Scott@GreatNorthernSurvey.com