Solar panels have become a hot-button issue for homeowners in the real estate world. Are they a good investment? Will they add value to your home when the time comes to sell it? Today I’m joined by Matt Mieras of CMG Financial to answer these questions from a lender’s perspective.
First, there are two main types of financing you see in our market: FHA financing and conventional financing. Additionally, there are two types of solar panel purchase agreements: You either buy them outright or lease them.
The challenge when it comes to leasing them, according to Matt, is that another company has security on your property. When you buy a home using financing, the bank or your lending company owns the home too, so if you stop paying your lease on your solar panels, it gives the creditor the ability to foreclose on the home. If you’re able to purchase the panels outright, that’s a different story, but when it comes to leasing them, it’s an exception-based system.
From a Realtor’s perspective, having solar panels on your home will narrow down your buyer pool. Not every buyer wants solar panels attached to their new home, and assuming someone else’s solar panel lease comes with a lot of unknowns.
When purchasing a home with solar panels, unless they’re completely bought off, the lender won’t finance the panels into the home purchase. When qualifying someone, they have to factor that lease payment into their debt-to-income ratio.
So, if you’re thinking of installing solar panels on your home, do your due diligence, interview several companies, and read the fine print. Also, make sure you know how long you’re going to stay in your home before you sell.
If you have any more questions for Matt, you can email him at MMieras@cmgfi.com or give him a call at (843) 670-5512.
As always, if you have any other real estate questions for me, feel free to give me a call or shoot me an email. I’d love to speak with you.
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