Home Equity Loan to Finance Your Solar Power for Homes
This is your traditional home equity loan, where you borrow money by using your home as collateral. These types of loans are the conventional means by which most people get the money to purchase their home solar power systems.
As a homeowner you can choose to find your own servicer for these types of loans or ask your solar installer to direct you to an independent loan provider. They often have a partnership with a provider they prefer to work with.
This can be beneficial since their provider will be more familiar with loans for home solar power system installations than your generic servicer since they have done business with your solar installer in the past.
Don’t discredit any servicer on the basis that they have never worked with solar energy systems loans before. There are more and more loan products out there that are taking into account the value a solar power system adds to your home’s resale value.
This can decrease the loan-to-value ratio by increasing the total appraised value of your real property–a key risk factor used by lenders when qualifying you for a loan.
So now your wondering how much value does a solar power system add to my property? Since there isn’t a lot of turnover of homes with solar systems installed it is hard to accurately calculate this value. However, it is often projected that any energy improvement made to your home adds twenty times the yearly energy savings in value to the home.
Say you install a solar system that saves $1,000 a year in your utility expenses. This would add $20,000 to the value of your home. Pretty sweet, right?!