The house I like has leased solar panels?

Leased solar panels are important to review before moving forward. In most cases, the solar lease is transferred to the new buyer at closing, meaning they take over the monthly payment. However, some buyers may push back on this, so it can impact resale and negotiations. As for financing, yes—the solar lease payment is typically counted as a monthly debt when you apply for a mortgage. This can affect your debt-to-income ratio and overall buying power. Before proceeding, I always recommend reviewing the lease terms, transfer requirements, and payoff options so there are no surprises on either side of the transaction.

Leased solar panels usually mean the buyer must assume the lease, but in today’s market—especially in mine—sellers often pay off the panels at closing since most buyers don’t want to take over the lease; the monthly payment does count against your debt-to-income for a new mortgage, and every market is different, so consult your agent about the best approach where you live.

There are three main types of solar: owned (or financed), leased, and power purchase agreements (PPAs). Leases and PPAs are similar in that you don’t own the system, and both can impact resale. In most cases, the buyer would need to qualify for and assume the lease or PPA, but that’s not guaranteed, which is why they can make a home harder to sell. Sometimes the seller ends up buying it out to make the deal work. A lease is usually a fixed monthly payment. A PPA means you’re required to buy all the power the system produces, whether you use it or not, so the cost per kWh really matters. I’ve seen some where the solar power actually costs more than the utility, so it’s something we’d want to review closely. As far as your next purchase, yes, that monthly lease or PPA payment can count against you when qualifying for a mortgage, since it’s considered a recurring debt. If the system is transferred to the buyer before you close, then it typically wouldn’t impact your approval.