Showing posts with label energy efficient mortgages. Show all posts
Showing posts with label energy efficient mortgages. Show all posts
Sunday, October 31, 2010
Financing Options to Help Make Your Home More Energy Efficient
We all want to do our part to help the environment and cut down on rising utility costs. But for many homeowners, green alternatives and upgrades are simply too expensive to be realistic. However, now is an excellent time to consider making eco-friendly home improvements, as an array of financial incentives is bringing these alternative energy systems into the mainstream for buyers, sellers and homeowners.If you’re in the market for a new home, you may be able to get more for your money when you consider homes with energy-efficient upgrades like solar heating or tankless water heaters. These systems mean lower utility costs every month, which leaves more room in your budget for a slightly higher mortgage payment.
If you plan to stay in your home but are looking for a way to save on monthly energy bills, you may qualify for state or federal tax credits or special financing that will help you make energy-efficient improvements. These upgrades will reduce your utility costs and benefit the environment.
If you’re thinking about selling your home, any energy-efficient upgrades you’ve added can mean a higher asking price. Eco-friendly homes are an increasingly popular segment of the real estate market and as more home buyers look for energy-efficient properties, those upgrades are becoming an appealing selling point.
If you need financing to make energy-efficient upgrades to your home, you can get the funds you need through either a government-sponsored program or a traditional lender. Certain states even provide special programs for residents who qualify, so it’s smart to begin your search with your state’s department of energy to find out what’s available in your area.
There are also special mortgage programs that can help you afford energy-efficient upgrades. Called EEMs, or energy-efficient mortgages, these programs allow both homeowners doing new construction and those making improvements to an existing structure to obtain financing. EEMs make it possible to purchase or refinance a home that’s already certified energy-efficient, or to purchase or refinance a home that will be energy efficient after certain upgrades are made. Most lenders offer both kinds of EEMs; you may also qualify for home-improvement loans that will help defer the cost of energy-efficient upgrades.
In order to qualify for these special mortgage programs, most lenders require homes to have an energy-efficiency rating. These ratings are based on an inspection by a certified professional and tell lenders how energy efficient your home is.
The energy rater will check all the features of your home that relate to its energy consumption. This includes windows, insulation, heating and cooling systems, water heaters, and ductwork. You will receive a report that includes your home’s energy rating, as well as an estimate of your yearly energy usage and spending. The report sometimes includes suggestions for improvements you can make to boost your home’s energy-efficiency and the costs of those upgrades, along with an estimate of the annual savings and return on investment of making changes.
Check Out These Resources from the Federal Government:
- U.S. Department of Housing and Urban Development - Energy Efficient Mortgage
Home Owner Guide - Energy Star - Energy Efficient Mortgages
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Friday, May 7, 2010
Energy Efficient Home Financing Options 2010
Most of us want to reduce our impact on the environment and are interested in ways that we can lower our monthly utility costs by making our homes more energy efficient. The one thing holding us back is the high initial cost of many of these greener alternatives.
Thankfully, there are several emerging options to help first-time buyers and established homeowners finance energy efficient initiatives.
Some government-sponsored loans and private lenders now offer special financing packages for energy efficient new construction or existing structure improvements. Many states also have special programs for qualified residents. It’s a good idea to check with the U.S. Department of Energy or your state’s energy office for more information about available programs and eligibility standards.
Energy Efficient Mortgages (EEMs) are among the most popular home financing options available today to consumers. EEMs are divided into two categories: new home construction and improvements or upgrades to an existing home. An EEM allows you to buy or refinance a newly-built home that already adheres to certain energy efficiency criteria, or to buy or refinance an older home that will be in compliance with energy efficiency guidelines following renovations and upgrades.
The amount of financing offered for energy efficient homes depends on the home’s energy rating. The higher the rating, the more money you may qualify for. Energy ratings generally involve extensive inspection by a certified professional who is accredited on the state or national level in home energy rating systems (HERS). HERS depends on where the home is located and may be affected by other factors.
When it comes time for en energy ratings inspection, the examiner will look at all of the energy-related attributes of the home: insulation, windows, HVAC systems, air leakage, drafts, and more. Following a comprehensive inspection the rater will provide you with a detailed report that clearly states your home’s energy rating, as well as information regarding your family’s average annual energy consumption and costs. The report could also include recommendations for improving energy efficiency, estimated costs of these improvements, and a breakdown of potential savings or return on the initial investment.
Once the energy rating report has been submitted by the inspector, it must show that the structure is already sufficiently energy efficient or that any suggested improvements are cost effective—that is, any improvements will eventually save you more money that you have to borrow to implement them. The energy rating will determine how much a lender is willing to extend in financing. A favorable rating will incline the lender to add the cost of improvements into the mortgage or may extend your debt to income ratio, helping you qualify for a better interest rate.
Energy efficiency is having an increasingly strong impact on the real estate market. For sellers, energy efficiency financing lets you make improvements that add value to your home and will make it more attractive to potential buyers. If you’re in the market for a new home, choosing energy efficient amenities can help you get more for your money, as lower utility bills mean you can afford to expand your mortgage budget.
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