Homeowners considering adding solar panels to their rooftops should beware of crooked lenders who mislead customers about the terms and conditions of their financing. Shady lenders might also misrepresent the savings that solar energy will deliver, pile fees onto borrowers' loan balances and misrepresent the impact of the federal solar tax credit.
Not all lenders are so dastardly. But if yours jams unnecessary fees into your loan, it could boost the cost of your solar panel financing by 30 percent or more above the cash price, according to a new report from the Consumer Financial Protection Bureau.
This comes at a time when solar energy is gaining popularity in mainstream communities, not just in affluent markets. The industry owes much of that growth to declining costs and larger incentives from Uncle Sam.
"The average residential solar project costs $25,000," reads the CFPB report, "and federal tax credits currently cover approximately 30 percent of the installation cost."
Last year, nearly 3 out of every 5 homeowners who opted for solar panels financed their projects. As the number of lenders in the field increases, some of them opt to partner with solar installers. The solar companies then employ a variety of marketing and sales tactics, including going door-to-door, to convince homeowners to go solar - and to finance the project with their lending partner.
But the watchdog agency found that the rapid rise of nonbank lenders partnering with solar salespeople is raising the potential for illegal behavior and consumer harm. The report states: "Many homeowners are discovering they are being duped and misled into contracts with inflated principals, ballooning monthly payments and electricity savings lower than promised."
The CFPB found four particularly significant risks: hidden markup fees that are often "baked into" the loan's principal; misleading claims, such as assumptions that the federal investment tax credit is a sure thing (it is not guaranteed); ballooning monthly payments, which could kick in if the tax credit is denied; and exaggerated claims that solar panels will eliminate their monthly energy bills.
The tax deduction for mortgage interest isn't as popular as it used to be, thanks to the passage of the Tax Cuts and Jobs Act in 2017.
From 2017 to 2021, the number of itemized returns dropped from 30.9 percent to 9.6 percent, according to an analysis by economists at the National Association of Home Builders. "Taxpayers who do not itemize their tax returns claim the standard deduction instead, and thus do not directly benefit from deductions such as the (Mortgage Interest Deduction)," reported NAHB.
Some 11.5 million returns claimed the mortgage interest deduction in 2021, and the total amount of mortgage interest deducted was $143.5 billion.
Per TaxPolicyCenter.org, the Jobs Act "increased the standard deduction from $6,500 to $12,000 for individual filers, from $13,000 to $24,000 for joint returns, and from $9,550 to $18,000 for heads of household between 2017 and 2018." That, coupled with a new limit of $10,000 on the write-off for state and local income taxes, started the trend toward less itemization.
Even with the McMansion-building spree of recent years, the good ol' U-S-of-A does not have the largest houses in the world. According to a meta-analysis from decor company The Perfect Rug, Australia ranks first in home size, followed by New Zealand. The U.S. takes the bronze.
In Australia, the average house clocks in at 2,303 square feet. In neighboring New Zealand, it's 2,174 square feet, while in the States, it's 2,164 square feet.
The average household size in all three countries consists of roughly 2.5 people.
According to a report from The Builder's Daily (part of Builder Magazine), the leaders of 21 publicly owned American homebuilding companies took home an average of $11.5 million in compensation last year. Each.
The range is significant: Stuart Miller of the Lennar Corp. earned the most on the list at $34.3 million, while Eugene Bredow of NVR earned the least, at $1.8 million.
And you wonder why housing prices are so high.
Certainly, these officials have delivered some of their organizations' highest earnings in what could have been several down years. But still - holy smokes.
"Real estate is a high-churn business," writes industry analyst Mike DelPrete on his blog: He says that roughly 144,000 agents switched brokerages between this June and last. That's 10 percent of the entire realty workforce, he points out.
According to DelPrete's analysis, the agents newest to the job were the most likely to switch agencies.