I wouldn’t be so sure that when you go to sell someone else is going to want to assume the solar loan.
Caught by surprise- BOA savings account interest rates
- Thread starter GON
- Start date
Is this a solar loan thread? Or a B of A product thread? Or a thread on managing your cash?
Because those three thoughts are so intertwined, I can’t tell what you’re asking, @GON
My oldest daughter has B of A for her checking and savings, because they had branch offices in New Haven, St. Louis and Salt Lake City (undergrad, med school, and residency) - and the checking account fees were reasonable.
Now that she has savings, she has a high-yield savings account with AMEX, because B of A offers such abysmal rates.
So, for your cash, get anything beyond monthly cash flow out of there and into something that is yielding better interest. B of A is absolutely ripping you off with those rates.
Because those three thoughts are so intertwined, I can’t tell what you’re asking, @GON
My oldest daughter has B of A for her checking and savings, because they had branch offices in New Haven, St. Louis and Salt Lake City (undergrad, med school, and residency) - and the checking account fees were reasonable.
Now that she has savings, she has a high-yield savings account with AMEX, because B of A offers such abysmal rates.
So, for your cash, get anything beyond monthly cash flow out of there and into something that is yielding better interest. B of A is absolutely ripping you off with those rates.
Realtors here say that Solar Loans when selling a house in Utah are a major obstacle. To me this type of home would be "flawed".
Fair enough. In situations like that understood that you do need to make those kind of concessions due to market pressures, no matter how bad of a taste it leaves in your mouth.
Which way does your gut have you leaning? Paying off the loan or establishing an account to draw from and make some interest?
I've used several online savings accounts to park cash not in the market. I settled on Barclay's a few years ago. Many of the others I used would offer a great rate of return, then lower it and never raise it again. Barclay's has fluctuated but upon comparison always has one of the highest rates of return (4.40% as of today).
https://www.banking.barclaysus.com/tiered-savings.html
https://www.banking.barclaysus.com/tiered-savings.html
I opened a huntington savings acct. I have my mortgage though them.. got 5.50% promo rate.. after 3 months it started dropping
now at 3.1% and going down..
they wont tell you what the rate is anywhere online.. only your "unpaid interest $$$"
you have to call or goto the bank to get the interest rate on your account.... scumbags.
I've drawn it down 80% and moved that to a 4% rate savings that actually gives you the rate online.
Its such a dirtbag scheme... oh wait its a bank.
now at 3.1% and going down..
they wont tell you what the rate is anywhere online.. only your "unpaid interest $$$"
you have to call or goto the bank to get the interest rate on your account.... scumbags.
I've drawn it down 80% and moved that to a 4% rate savings that actually gives you the rate online.
Its such a dirtbag scheme... oh wait its a bank.
JHZR2
Staff member
Surprise? It’s been the case for the last 25+ years.
GON
$150 Site Donor 2025
@Astro14 , the thread transistioned from interest paid on savings accounts, to the "why" there is a assessment of a savings account over a CD as a potential course of action to solve a problem of a likely preditory solar loan at a interest rate of 1.99%.
It is a complex problem, not because of the interest one may earn on a $45k USD savings account paying four percent, over the charged 1.99 percent by the solar lender. The critical decision is " paying off the loan may result in the loss of $45k USD, if we decide to sell the home in the near future". The home will NOT sell for an additional $45k USD if we pay off the loan, but a buyer may be willing to assume the $45k USD loan, as a requirment to purchase the home, as we did.
My interim action is to pay an additional $500 per month on the solar loan. This measurably reduces the loan balance, but does not zero out the loan balance.
Well, 1.99% on a loan is hardly predatory, when cars are running 5-6%. Or higher for those with credit problems.
Without reading the terms and condition to the loan, I’m hard-pressed to advise you which is the wiser course, continue to make the payments, or just get rid of the thing altogether.
It seems the answer to that question is largely rooted in philosophy, and not in mathematics.
It really depends on how long you intend to own the house to determine whether or not it is advantageous to carry the note, or to get rid of it.
Without reading the terms and condition to the loan, I’m hard-pressed to advise you which is the wiser course, continue to make the payments, or just get rid of the thing altogether.
It seems the answer to that question is largely rooted in philosophy, and not in mathematics.
It really depends on how long you intend to own the house to determine whether or not it is advantageous to carry the note, or to get rid of it.
If not flawed, at least unattractive.
Selling a house with an encumbrance, can be difficult in a lot of markets. If solar loans are common, then it’s gonna be more acceptable to the buyer, but I wouldn’t buy a house with an encumbrance, and I wouldn’t take over a loan like that.
I would simply pass.
GON
$150 Site Donor 2025
Issue is the value of the solar, installed, new is likely $15k-$20k USD. Reportedly the solar lender takes 25 percent underwriting fee on the gross loan proceeds, in this case was $50k USD. The solar lender actually funded the loan for $37,500 USD.
Imagine if a bank added a 25 percent fee to underwrite and fund a home loan.
Loan was underwritten at a time of interest rates for consumers were at two-three percent for borrowers with excellent credit. The buyer of the solar was what I assumed a intelligent married couple. He is a F 16 pilot, she was a consultant for a major tech firm.
I have no idea how or why this highly educated couple signed this horrible deal. Our electric bills are $11 USD per month. The couple was able to receive what is thought to be a significant federal tax break, equalling what I suspect was in the $15k USD range.
Speculation is , couple currently has a $200 per month electric bill. Buy this solar, payment of $212 per month equals the electric bill, and couple gets a very small five figure windfall.
Sounds good on paper, until one discovers almost every solar contractor goes out of business, so no warranty. Contractor uses the cheapest sub contractor, so likely damage to the roof that won't be discovered until the contractor is bankrupt. And finally, the solar won't last as long as the life of the loan. Many reviews in BBB state the homeowners often never got their solar working, payments starting one year after the contract signed, so contractor got paid, and went BK. Homeowner doesn't know loan was funded, so the homeowner now on the hook for $50k USD.
Something possibly overlooked. The tax credit is actually a loan from Chinese peaseants and the like, that expect to recieve four percent acrured interest on their loan to the U.S. taxpayers, to fund the solar tax credit. U.S. government didn't have the funds for the solar tax credit, but instead borrowed the money for the tax credit.
Very dirty business by all parties.
Imagine how much of a win it would be for all Americans wanting solar for their single family homes, if the U.S. Government stayed out of the solar business. In my case, the homeowner likely would have paid $15k USD instead of $50k USD.
Last edited:
This is a what I would do. I honestly don't tell people how to use their money. I am not a fiduciary, and there are too many variables - including how you feel about things. So this is just what SC would do.
The $47K is your debt whether it was originally predatory or not. I would not pay off a 1.9% note early - ever. Also I would not spend the money. I would invest it in something completely safe as your planning. Why?
Being liquid is really nice. I would rather have $47K in a liquid account than in a solar system - whether I like the system or not. You never know what life holds.
I know some people don't like any debt. I see it like a corporate balance sheet - if I have as much liquid assets as my debts, then its not really a debt. Its just credits and debits.
If you hold the house for a long time, it will appreciate enough likely to simply have the next person roll the entire thing into the home note - even if they cannot assume the note. If not you simply pay it then.
You won't borrow at 1.99% ever again. In fact, my guess is that in the long term - 5+ years, interest will be much higher than now. The globe has too much debt that can never be repaid, so it must be inflated away. If your CD is paying 7% five years from now, you will feel foolish for paying off early.
Now having said all that, you might have 25 reasons why paying it off is better. To each his own.
Last edited:
exactly right.
10 years back or more I’m sure it’s changed from then, but a division of my company hit gold in getting into the solar business.
All the bologna of government rebates, yada yada greatly reduced the over inflated cost to the homeowner of the system to begin with. Sales people in small outfits were making a fortune while people thought they were getting government discounts in reality those discounts were going to the company and the sales people with huge commissions.
I think things are now changed at least with some companies where you actually order almost direct with no sales people. The advertise prices if I remember correctly, some 30 to 40% lower.
We had Vivint here who started in security systems and then started selling solar.
You can dump it in FZDXX too and get about 4.14% on $100K or more and do essentially the same thing if you have $100K to park there.
…
Yes, the company headquarters for Vivint is in Utah
They reach all the way here down into the southeast. We would take over a number of their systems many times from disgruntled homeowners who got wrapped into contracts they didn’t read and boy did some people really end up paying high monthly fees. I have a very negative opinion of them, but that was in the very limited area of the southeast.
With that said some of the sales people for our company would be no better even though we did not tolerate them sometimes we would find out late in the game.
Anyway, like the Security business, the solar system was exactly the same. The charming sales person would come in and show this people. What a great deal they were getting sign on the dotted line and then you’re stuck.
Last edited:
From a detached, unemotional perspective, your situation is not a complex problem at all. The only sound financial strategy is to make the minimum required $212 monthly payment until you decide to sell the recently acquired home. As you and many others stated above, invest the surplus "early payoff" money in a high yield savings account earning 4+% which keeps the funds liquid and keeps you ahead of the 1.99% interest loan. If the next home buyer assumes the solar loan, you are way ahead. If they don't, you are no further behind (actually 2% interest per year ahead) paying it off as part of completing the sale.
Your interim strategy of $500/mo. payments make zero sense financially as I see it as a compromise to allay some of your emotional discomfort with carrying any debt (to which I can relate).
Totally agree. You are in essence paying 1.99% to use someone else's money, however, you can earn twice that if thrown into a 4% (doable) interest savings account and pay the minimum each month. If you need to sell, you have assets to cover the solar if no buyer wants to assume. Or, hopefully, home value rises enough to fair market the home AND solar in the asking price. Either way, you would be at least 2% ahead until decision time comes with sale of the house.
GON
$150 Site Donor 2025
That is the issue, I don't like debt. Especially when the asset is worth $10k-$15k USD, and the balance on the loan is $45k USD.
You are correct, a emotional issue--- not a math issue.
Similar threads
