How Will Solar Panel Installation Affect My Mortgage?

The Hidden Truths behind Solar Panels and Your Mortgage

A picture showing a home, a solar panel, and a dollar sign representing a mortgage.

There are many things we think of when we hear solar-powered energy; cost savings and green living are among the first.  For the true money conscious you might think tax credits, federal incentives, additional income and an increase to the value of your home.

All of these may be true, but did you also know that the method you use to pay for those solar panels can have serious implications if you want to sell or refinance?

It’s important to understand the pros and cons of installing solar panels, but more importantly how you pay for them and how that affects your mortgage application.

As a homeowner who is considering selling a home with solar panels if you purchased the equipment outright without any financing, then you should be good-to-go.

Paid in Full

A great benefit to the FHA loan is that the home is assessed and added to the total appraisal value of your home.


If you are unable to purchase your solar panels outright, there are lease or finance options.  If you decide to go this route be sure to ask a lot of questions.

If you lease your solar equipment, the lease payment must be included in your debt-to-income ratio because leased systems are considered personal property rather than part of a house.

If you’ve got a leased system and plan to sell or refinance, contact the leasing company well in advance to learn about the lease transfer and buyout options.  This may save both you and the buyer from headaches in the long run.


It’s always important to find out the manufacturer’s policies before having solar panels installed.  Purchasers may not know that the solar panel manufacturer may place a lien or Uniform Commercial Code filing on your property to make sure you keep paying for your solar panels.

Unfortunately, when you go to refinance or sell the property, it’s generally troublesome to have any kind of lien on your home, because underwriters need to determine the effect on your debt-to-income ratio and any title or lien implications before they approve your mortgage application.

Find a lender who is knowledgeable about the ins and outs of solar and renewable energy sources, there are many caveats that you will sure to need guidance on. Please contact us for any questions or help when purchasing a home.

The Certo Team
55 N. Arizona Place
Suite #103
Chandler, AZ 85225

Contact a licensed housing specialist now! 602-429-6789