One common question people considering making the switch to solar have is how installing solar panels will affect the value of their home. Understanding how installing solar adds value to your home and how solar financing works will help you feel more confident making the switch. Here are a few common questions our customers have had.
If I invest in solar panels, does this put a lien on my home?
First, it’s important to understand that a lien is a legal claim to the property of another person until that person pays off the debt owed to own the property. In other words, if a lien is placed on your home, the home becomes the right of the bank, or lender, to sell when the homeowner fails to pay off the loan. Therefore, if a home is the subject of a lien, the homeowner cannot sell or refinance the home without the approval of the bank, or lien holder.
Auric does not put a lien on your home when we install solar panels. The solar loan is for the panels only. The bank who finances the installation puts what is called a Uniform Commercial Code Financing Statement, or UCC-1 fixture filing, on the panels once they have been installed. This filing is simply a way to ensure that the bank’s asset (the solar panels) is protected until the homeowner pays the solar loan in full. The filing shows up on your home title to inform anyone completing a title search on your property that our property (the solar panels) is installed on your home. This is done to prevent a bank, or lender, from taking ownership of our property should the homeowner default on their home loan or foreclose.
What happens when I try to refinance my home with the UCC-1 filing on my title?
Unfortunately, some lenders consider any filing on the title of a home a black mark and will not refinance until the title is cleared. If a homeowner decides to refinance their home during the period in which the solar loan is being paid off, we can help facilitate the process to ensure that a lender does not consider the UCC-1 filing a black mark on your title because it is not. Our financial partner can help you find a mortgage company that has specialized solar refinancing options. With one phone call, they can remove the UCC-1 filing from your home during the refinance period and re-file when the refinancing is complete for a small fee. Or, you can include the balance of your solar panel loan in your refinancing loan and pay it off that way. With this option, the UCC-1 filing does not need to be replaced.
When I owe money on my solar panels, does this affect my ability to sell my home?
No, owing on your solar loan does not impact your ability to sell your home. In general, having a solar system adds value when calculating the price of your home. On average, a home with a solar system sells for about $15,000 more than a home without. In addition, the benefits of a solar system make your home easier to sell. You can make a profit selling your home with solar and the new homeowner will benefit from solar power and lower energy bills.
If you still owe on your solar loan when your home sells, there are a couple of options. One, you can transfer payments of the solar loan to the new homeowner for a fee. Our financial partner can assist you through the process. However, if the new homeowner does not want to take over payments of the solar loan, it is up to you to pay off the loan because you are the owner of the solar loan and equipment thereunder. In this instance, the increased sale value of your home can help offset or cover the balance of your solar loan. In most cases, you will make a profit and pay off your solar loan by selling your home with a solar system.