Unlocking the full potential of solar powered for your home comes with some unique financing considerations. It's important to understand the impact that solar panels can have on your mortgage. The journey can be complex. Our team is here to simplify the process and guide you through the intricacies.
** Financing your new home **
Conventional Mortgages - Purchasing a home with solar panels might impact your eligibility for a conventional mortgage. While solar panels are typically considered an improvement, the current financing on the panels could impact your debt ratios as well as determine if they are allowed to be included in the final appraised value of the home. It is important to ensure that the panels meet all the lending requirements.
FHA, VA, USDA Mortgages typically offer more flexibility and could be considered a little more solar friendly. Still it is crucial to investigate any solar panel additions to ensure there are not any issues meeting lending guidelines.
** Tax Benefits and Incentives **
There may be Federal Tax Credits available through the installation and utilization of solar panels available. The federal government has provided substantial tax credits in the past but it is important to stay updated on any changes.
State and Local Incentives could provide additional benefits specific to your location. Many states offer rebates, grants, or tax credits and could enhance your overall savings.
"" The Pro's & Con's **
Solar Panels can significantly reduce your energy bills, making your home more cost-effective in the long run. On the flip side, they may have high initial installation and financing costs that need to be considered.
While solar panels are generally low maintenance, occasional cleaning and check-ups may be necessary. Understand the maintenance requirements and associated costs.
Another consideration is the possibility of limitations with regard to the purchase and resale of homes with solar panels.
* Homebuyers must understand that buying a home with solar panels may require them to assume any financing debt that is still due on the panels and the effect that may have on your purchase power and debt ratios.
* Home Sellers need to understand that depending on how the solar panels are financed or leased could impact potential buyers, including assumption clauses by some solar finance companies that will not allow the assumption of that debt by a home investor, possibly limiting the overall buyers pool.
** Maintenance Plans **
Check the warranty and maintenance plans that is provided for the solar panels. Some providers offer comprehensive plans that cover maintenance, repairs and in some cases, even equipment replacement.
* Homebuyers should inquire with the seller regarding any maintenance and warranty plan transfers. Understand that the assumption of the solar panel financing does not necessarily ensure that the warranty or maintenance plan has been transferred as well. Often the financing is through a 3rd party company and is not affiliated with the solar panel company so check with the Seller on how to protect your investment.
** Insurance and Solar Panels **
Installing solar panels can affect your homeowner's insurance. You will want to ensure your insurance provider is aware of the solar installation and your home owners insurance coverage is adjusted accordingly.
** Things to Know Before You Glow **
* Leasing vs. Owning - Determine if the finance options on the solar panel are a lease, and if you are leasing to own. Each option comes with it's own set of advantages and drawbacks, affecting your financial commitment and long-term savings potential.
* Financing options could also include non-recourse or full recourse options, meaning that the finance company can repossess the panels should payments not be made. See the Savvy Solar Flyer attached for more info.
** Resale Value **
Solar panels can increase the resale value of your home but depending on how they are owned may preclude the solar panel from being included in the appraised value of the home with regard to the mortgage value. Potential buyers are increasingly attracted to energy-efficient features, especially as we see energy costs continue to rise. Highlighting solar panels when putting your home on the market can provide you advantages in the marketplace, but it is always a prudent idea to determine how your specific situation could enhance or deter financing options.
Armed with knowledge, your ready to make an informed decision regarding homeownership that align with your financial goals.
Remember, our team is here to illuminate every step of your solar and homebuying journey!
For personalized guidance, contact us at
http://www.YourLoanPro.com 