The Lowtility solar + home loan product: The complete review

Buying a house is a significant investment with many long-term variables to consider, including location, home style, sales price, and monthly utility bills. When applying for a home mortgage, new buyers may also have the opportunity to think about other large home improvement investments 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.

Lowtility is a product offered by Primary Residential Mortgage Inc. (PRMI), a large national financing company based in Salt Lake City, Utah. PRMI originates $5-6 billion in loans annually and operates in every state except New York. With its long history of providing direct-to-consumer home financing solutions, PRMI is very well situated to offer a compelling financing product for solar consumers and installation companies.

The solar + home loan product through Lowtility allows new homebuyers to finance the cost of their new home and a solar energy system through the same loan. Solar shoppers can also purchase smart home upgrades as a part of this offering, from security to automation products.

There are several key reasons to consider financing your solar panels with your home mortgage:

1. First, by purchasing solar panels while you buy your home, you can generate the most value from your solar energy system, reducing or eliminating your electricity bill from day one.

2. 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.

3. Third, in many cases, paying the interest on your mortgage is tax-deductible, whereas paying your electricity bill is not, meaning that you may increase your tax deductions by paying for solar as a part of your home mortgage.

4. Fourth, financing your home and your solar project simultaneously means you only have one monthly payment instead of multiple payments, lending greater simplicity to your finances.

5. 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.

A typical home-buying process may take one to three months (or more!) During the process, there will likely be several weeks or months between your offer being accepted and the final closing date when you take complete ownership of the house.

New homeowners using the Lowtility loan will perform home inspections, appraisals, and energy audits to see how efficient the house is and whether any energy efficiency upgrades are necessary. Next, a solar installation company will design a custom solar quote for your home based on your roof size and the previous owner's electricity usage.

With the solar quote, you can finalize the mortgage amount for 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 after that) so you never have to pay an entire month's electricity bill.

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 if you place at least 4% down on your new home.

At present, the Lowtility solar + home loan product is open to multiple different solar companies. If you're buying a home, you can use our Solar Calculator first to estimate the system size you need and then register for a free account on the EnergySage Marketplace to get competitive solar quotes. You can select the solar installation company through EnergySage to finance your new home and solar energy system through the same Lowtility loan.