Lifetime mortgages are increasingly being used to fund methods of making a property more energy efficient. Including having solar panels installed. But what if you already have solar panels and you are thinking of taking a lifetime mortgage? Here’s what you need to know about solar panels and lifetime mortgages.

What are the different ways solar panels can be owned?

There are three ways to own them:

1) You can buy them all at once,

2) You can pay for them over time with a special agreement, or

3) You can rent, or lease them.

Each way has different rules from the people who lend you the money for a lifetime mortgage. If you have solar panels, it’s important to tell your adviser which of the three ways of owning them apply to you. This will help the lender process your application quickly and allow the solicitors to prepare the right papers.

Leased solar panels

Sometimes, with a lease, or rental agreement a company may offer to install solar panels on your roof so you can have cheaper energy. But if you accept their offer, the solar panel company will still own the panels. They will just lease the space above your roof to put the panels on.

This lease is an agreement between the owner of the property (you) and the solar panel company. This lease can cause problems for you if you are applying for a lifetime mortgage lender later on. This is because if the lease doesn’t follow certain rules, typically as set out by The Council of Mortgage Lenders (CML) you might need to change it using a Deed of Variation through the solicitors with the solar panel company, which can take a long time and delay your plans.

How does a deed of variation work?

Your solicitors can talk to both the solar panel company and the lifetime mortgage lender who is giving you the money in order to help fix any problems with the agreement. You’ll need to sign a special document called a Deed, and then it will be checked and approved by the land registry before you can finish getting your money from Equity Release.

Sometimes, this process can take a long time and slow things down.

Some solar panel companies have their own papers that they don’t want to change for the Equity Release lender. If this happens, you might need to find a new lender instead. The cost to fix these problems is usually around £500 plus some extra fees from the solar panel company.

The earlier these issues are dealt with, the faster they can be sorted, so it is important that your adviser is given the right information about the solar panels as soon as possible.

If the existing lease is compliant, will there be any other requirements?

If the agreement you have for the solar panels on your roof follows the rules, then you can still borrow money (called Equity Release) from a bank and it shouldn’t be a problem.

However, different banks might need different papers from you. They might also ask for some other papers, like a certificate that says the solar panels are good and the company that put them in is trustworthy. You can find some of this information online, but it’s good to have as much as possible before you start the process.

Even if the agreement for the solar panels is okay, the bank might still need some more papers from you before they can give you the money.

Owned solar panels

If you own the solar panels outright, you might still need to show papers to the lender that is giving you the lifetime mortgage.

They might want to see a certificate that says the solar panels are acceptable and some papers, such as receipts and guarantees, that show you bought them. This might be a problem if you haven’t kept the original paperwork or if the company that made the panels isn’t around anymore. But don’t worry, copies can usually be obtained from a central point that holds this type of information.

Sometimes a lender might still want to see confirmation that says you don’t owe any money to the solar panel installer.

What happens if you don’t have the lease paperwork?

If you don’t have the lease paperwork that says you can put solar panels on your roof, or if you lost it, the lifetime mortgage provider might not give you the loan until you find it or get a new paperwork. Your solicitor can help you get a new paperwork that says you can put solar panels on your roof, but it can mean using a third party. Getting replacement lease paperwork might involve an additional cost, but you should always be told how much this would be before proceeding.

Hire purchase agreement solar panels

If you have solar panels on your roof that you’re paying for through a hire purchase agreement or a green deal scheme, the lender may ask you to pay off the full amount you owe before they let you get an Equity Release mortgage.

Even if you don’t owe any money on the panels anymore, the lender may still want proof that they’re paid off. This can be a big problem if you didn’t plan to pay off the panels as part of your Equity Release, or if you didn’t budget enough money to do so. But your solicitor can help by contacting the company you owe money to and finding out how much you need to pay off. Then, if necessary, the solicitor can use some of the money from your Equity Release to pay off the debt.

Different lenders have different rules about solar panels, so it’s hard to know exactly what they’ll ask for until you receive an offer. But if you give your adviser as much information as possible about your solar panels, it will be easier to deal with any issues before you apply for an Equity Release mortgage.

Generally speaking, having solar panels should not cause many issues when applying for a lifetime mortgage. The main thing to remember is to always provide as much information as possible, as early as possible. That way, any potential problems can be addressed quickly and delays with your application kept to the minimum.