Frequently Asked Questions
Follow Agency and Government guidelines. I’ve gotten mixed messages on VA loans. Technically solar is considered a utility bill and VA & FHA both indicate that utility bills shouldn’t be calculated in the DTI.
- The contract will have a TIL disclosure
- The contract will say “you don’t have the option of purchasing the system”. This means it’s not financed
- If it’s on the credit report, more than likely it’s financed, but double check with the contract. Also, if there’s a second lien on the home and being reported on title and credit, it could mean that the client pulled financing from a lender, i.e. Credit Union, in order to purchase SOLAR.
- By reviewing the contract especially if the solar is financed. 9/10 times the contract itself will have verbiage regarding that state of the solar property and whether it’s considered “real property”. If the solar lien isn’t attached to the home, than it will not need to be subordinated.
- Go to the solar company website. The website will have FAQs or more information regarding how the solar property will affect the purchase or refinancing of a home
- Call the solar company directly and ask. When the contract is unclear and Title takes too long, I’ve called the solar company and verified directly with them whether they require subordination or not. My experience has been that they don’t want to deal with subordinations.
Once we find out that the property has solar, the immediate next step is to get the solar contract. This will tell us if the solar is financed or if it’s being leased (not owned by client).
If it’s being leased, and not owned by the client, then it’s an easy temporary removal of the UCC. Can’t subordinate something that’s not owned.
- Tesla has a website where we can request the contract, UCC Termination and Fannie Mae addendum form that I find extremely helpful and therefore don’t use Title as a middle man.
- Other companies have processes in place where we can request the contract directly from them. It only takes a call to the solar company to find out
- Request from the client or pull from the previous file
- Request from title
- Directly from the client (rare)
- They are recurring clients and I have a good memory
- On the credit report. Many times when the solar is financed, it will show on the credit. For example Mosaic Solar. Huge red flag that property has solar
- Many times the solar shows up as a mortgage. If the lien isn’t attached to the property, we order a credit supplement to correct the type of liability to installment
- From the title report. The UCC/lien will show most of the times on Schedule B. It’s a hit and miss whether the title company actually points it out and therefore imperative that Operation staff review pre-lims.
- From the appraisal report. Does appraiser note if it’s outright owned, leased, or financed?
The interest rate is the cost to borrow the money in your loan, while APR (annual percentage rate) adds an upfront cost of getting the loan including points and lender fees.
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Your down payment will depend on the type of home you decide to buy, and the type of financing you choose. Typically, you can expect to spend a range of 3%-20% of the home’s purchase price on a down payment.
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The time frame for getting pre-qualified is hard to predict as many factors are involved. A good rule of thumb is that the faster you are able to provide the requested documents and information, the faster the process takes. A pre-qualification can happen overnight or it can take a long period of time. Your loan officer will go over what it entails in detail and will do everything possible to get it done quickly.
Your credit history and credit score effects the interest rate you will be offered, the amount of money you are able to borrow and whether or not you will be approved for a loan. Your loan officer will go over all of this and even make suggestions (if need be) as to how to improve your credit score.