Buying a house is a major investment that comes with many long-term variables to consider, including location, home style, sales price, and monthly utility bills. During the process of applying for a home mortgage, new buyers may also have the opportunity to think about other large home improvement investments that they would like to make once they move in to either increase the value of their home or decrease their monthly homeownership costs. The new solar + home loan from Lowtility is a unique option for home buyers looking to do just that by financing both a house purchase and a solar energy system installation all at once.
Taking a look at the Lowtility solar + home loan
Lowtility is a product offered by Primary Residential Mortgage Inc. (PRMI), a large national financing company based out of Salt Lake City, Utah. PRMI originates $5-6 billion in loans annually and operates in every state except New York. With their long history in providing direct to consumer home financing solutions, PRMI is very well situated to offer a compelling financing product for both solar consumers and solar installation companies.
The solar + home loan product through Lowtility allows new homebuyers to finance both the cost of their new home and a solar energy system through the same loan. What’s more, solar shoppers can also purchase smart home upgrades as a part of this offering, from security to automation products.
Why finance solar with your home mortgage?
There are several key reasons to consider financing your solar panels with your home mortgage:
- First, by purchasing solar panels at the same time that you buy your home, you are able to generate the most value from your solar energy system, reducing or eliminating your electricity bill from day one.
- Second, there are costs associated with originating both mortgages and solar loans: by including your solar panels in your home mortgage, you can avoid one set of these origination fees, reducing the all-in cost of your solar energy system.
- Third, in many cases, paying the interest on your mortgage is tax-deductible, whereas paying your electricity bill is not, meaning that you may be able to increase your tax deductions by paying for solar as a part of your home mortgage.
- Fourth, financing both your home and your solar project at the same time means you only have one monthly payment, as opposed to multiple payments, lending greater simplicity to your finances.
- Finally, putting solar panels on your roof will increase the value of your home. A recent study by Zillow found that, on average, homes with solar panels sell for 4 percent more than similar homes without solar.
How the solar + home loan works
A typical home-buying process may take anywhere from one to three months (or more!) During the process, there will likely be a number of weeks or even months between when your offer is accepted and the final closing date when you take complete ownership of the house.
New homeowners using the Lowtility loan will perform not only home inspections and appraisals but also home energy audits to see how efficient the house is and whether any energy efficiency upgrades are necessary. Next, a solar installation company will come and design a custom solar quote for your house based upon your roof size and the previous owner’s electricity usage.
With the solar quote in hand, you can finalize the amount of the mortgage for both your new home and solar energy system. And once the mortgage is finalized, the solar installation company can begin the process of installing solar panels on your property, meaning that you may even have the solar energy system installed before you move into your new home (or soon thereafter) so you never have to pay a full month’s electricity bill.
The terms of the Lowtility solar + home loan
Mortgage rates change daily, so it’s impossible to say exactly what rate the Lowtility product will offer. However, Lowtility has informed EnergySage that their loan product is competitive with a traditional purchase mortgage from a rate perspective. The length of the Lowtility product is also comparable to a home mortgage, as they offer terms in five-year increments from 10 through 30 years.
Because home mortgages take into account additional information beyond just your credit score, the Lowtility solar + home loan product has different eligibility requirements than a standard solar loan, including being available for shoppers with lower credit scores than are often accepted by solar loan providers. The solar + home loan is available as long as you place at least 4 percent down on your new home.
How to take advantage of the Lowtility solar + home loan
At present, the Lowtility solar + home loan product is open to multiple different solar companies. As such, if you’re in the process of buying a home, you can use EnergySage Solar Calculator to first estimate the size of system you need and then register for a free account on the Solar Marketplace in order to get competitive quotes for solar. You can select the solar installation company through EnergySage and then finance both your new home and solar energy system through the same Lowtility loan.