Adding solar power to your home is an excellent way to save thousands each year through lowered energy bills and big tax incentives. However, the inclusion of solar panels in a home can affect a real estate transaction in a few ways. I’m here today with Ben Benjamin, assistant vice president of Ticor Title, who will tell us all about how solar panels affect the home buying and selling processes.
To acquire solar panels, financing is assessed through property taxes. This will cause your property taxes to be higher, which is important for you to tell your lender. Traditional loans can also cover the costs of the panels, but, again, you should notify your lender—they’ll take the steps necessary to close on a transaction with solar panels.
If you’re buying a home with solar panels that were assessed through property taxes, your qualifying ratio will be affected. When the lender factors in your monthly payments, they’ll also need to factor in the additional amount. If it’s a more traditional type of loan, there’ll be an extra step needed to release the loan while you’re closing and add it back on afterward.
As solar power continues to rise in popularity, more and more lenders are becoming familiar with the process; some lenders even have entire departments that deal solely with solar panels. Regardless, it’s good to start the conversation about solar power early.
If you’re thinking of selling a home that already has solar panels, make sure your Realtor knows how to market its great benefits.
I’d like to thank Ben for giving us some insight into how solar panels affect real estate transactions. If you are thinking of buying or selling a home, have any questions, or need more information, feel free to reach out to me. I look forward to hearing from you soon.