Information on financing a new solar power install
When searching for ways to decrease your carbon footprint when either building new properties or extending existing properties, one of the best ways to do this is by adding a renewable energy source such as Solar Panels, Wind Turbines or Geothermal Heating.
Although these are all great ways of not only offsetting your current carbon footprint but 2 of these options also allow you to sell back any power that is generated but not used back in to the Power Grid, although this is great news if you have done any type of research you will know that Solar Panels and Wind Turbines don’t come cheap and can actually push the build costs out of your budget.
What is the solution
If so, you have two main choices. A re-mortgage involves you switching your entire mortgage balance to a new lender and, if necessary, borrowing some additional funds. A secured loan means that your mortgage remains where it is and you take an additional sum with a second, different lender.
There are various pros and cons of each method of borrowing. So, to help you decide which one might be more appropriate for you, here are four questions you should ask when considering a secured homeowner loan versus a re-mortgage.
- Mortgage
You could re-mortgage your current property, but as with a lot of things when it comes to financing you are at the behest of the banks on whether it works out financially profitable to allow you to add these to your property.
- Secured Loans
Another possible option that you could go with is a secured loan, this are usually offered via finance companies that aren’t part of the larger banking sector, the finance terms generally are more fluid and amenable to what they are being applied for.
Do your circumstances allow you to re-mortgage?
If you apply for a new mortgage or a re-mortgage is a lender will underwrite your application this means that:
- You will have to prove your income to cover the whole of the total mortgage
- You will be restricted by the maximum ‘loan to value’ of the new lender
- The lender will access your credit file
A secured homeowner loan has different underwriting criteria. Lenders may charge slightly higher rates but they will often consider your application if you are self-employed or if your credit rating is less than perfect.
Which is more financially worthwhile
When considering a secured homeowner loan or a re-mortgage it is important to work out which option makes more financial sense to you.
For example, if you have thousands of pounds worth of ‘early repayment charges’ for re-mortgaging, a secured homeowner loan may be more cost-effective. However, if you have plenty of equity in your property, a good credit score and a high income, a re-mortgage may offer better value for money.
As well as the interest rate being charged on the borrowing, don’t forget to take fees, charges and any penalties into account.
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