If youre financing your solar panels, any payments have to be included in your debt-to-income ratio (DTI). These payments are accounted for like any other bill, so you should keep in mind that a big loan with big payments can lower the size of the mortgage you can qualify for.
Solar panels also cant be the only source of electricity on the property. All the major mortgage investors, including Fannie Mae, Freddie Mac, the FHA and the VA, require the property to have an alternate source of electricity. This is because the property wont be considered livable if your solar panels fail and theres no electricity.
One other item to note is that payday loans KY if youre looking for a home with solar panels, you need to make sure that you actually get the panels with the sale. Many lease agreements allow owners to remove the panels and install them at a new property.
Now, if you do obtain ownership of solar panels through a sale, its important youre aware of what this might mean for you.
If youre specifically looking for a home with solar panels, buying a home with a fully owned system would be your ideal plan. Thats because the previous owner purchased the panels up front, so they are entirely owned by the seller. So, instead of coming with any complications or strings attached, they just come with a higher price on the house.
As previously mentioned, leasing a solar panel system means the homeowner sends monthly payments to the company that installed the solar equipment. If the house youre interested in is leasing a solar panel system, its important that you find out more information about the lease terms and you understand the lease contract and deal. Feel free to ask about what monthly fees come with the system, and find out whether payments are escalating or not. If youre satisfied with the lease terms, and your personal financial situation can handle a solar system lease, the solar company can easily transfer your name to the lease after you pass the credit check. But if youre set on a house and not comfortable with the current lease, its possible that you might be able to negotiate with the previous owner to see if they will compensate you or pay off the remainder of the lease.
Unlike a lease, if a homeowner installs solar equipment with a solar loan, the loan will always be their liability, even if the property is sold. So, if youre looking to buy a home with solar panels financed through a solar loan, you dont need to worry about making additional monthly payments. Instead, the asking price for the home might be higher to factor in the cost of the solar equipment.
PACE financing is attached to the property, and not the person who took out the loan since payments are made through property taxes. Therefore, the solar equipment payments become your responsibility when you purchase a home that has PACE financing. If youre thinking about taking on PACE financing payments with the purchase of a new home, you should review the financing terms before you make a purchase.
Unfortunately, many lenders, including Rocket Mortgage ® , dont allow you to get a mortgage with an existing PACE loan because PACE loans are structured to take precedence over the mortgage.