Energy-efficient mortgages can add value to your home and reduce your utility bills!
If you are like me and would rather buy a older home but want the energy efficiency & monthly cost savings the new construction homes come with, then you should consider buying the older home of your dreams and get an Energy-Efficient Mortgage (EEM).
Several federal agencies and many lenders now allow you to finance a wide range of energy-saving home improvements with your home loan. Fannie Mae, The Federal Housing Administration (FHA), and the VA all offer loan programs with special benefits for energy-efficient improvements.
The energy efficient mortgages stretch buying power by allowing the lender to increase your income by the amount of estimated energy savings, thus increasing the debt-to-income ratio. The cost of the improvements are added to the mortgage, but typically lower energy bills will offset the higher monthly loan payment. The goal is to make improvements that will save you money on your monthly utility bills, make your home more environmentally sound & more energy efficient while increasing the resale value of your home.
Some of the energy-saving home improvements might include, but are not limited to, the following:
Tankless Water Heaters
Dual Pane Windows
Lighting & Appliances
Heating & Air-Conditioning Systems
If you are interested in getting a Energy Efficient Mortgage the first step, after finding a home, begins with an energy-rating survey. Assessing the home's energy efficiency and generating a score using a Home Energy Rating System (HERS) index is completed by a trained Energy Rater. The rater goes to your home and completes an inspection to find out just how energy efficient the property is. The rater will take into account factors like insulation, windows, heating and cooling systems, and local climate to give the home an overall rating. A rating index is from 1 and 100. A lower index indicates great efficiency.
The survey helps determine which improvements will be included in the loan. Once the loan is approved and the home is sold, work starts immediately to make the home more energy efficient. You loan officer or real estate agent can help you find a certified HERS rater.
The cost is generally between $200 to $500. This amount can be financed into your loan if necessary. With conventional loans, funding for energy improvements is usually capped at 10% of the final appraised value of the property while FHA & VA loans typically have more stringent limits.
Home buyers and homeowners have different reasons for greening their homes. For some it's about cost-benefit; they want to know how quickly upgrades will pay off and enhance property value. Heath concerns such as improving indoor air quality motivate others. Some are interested in greening their homes for overall comfort, aesthetics, enhancing the quality of life, or just keeping up with the latest green trends. Regardless of the motivation, there are many benefits of greening an existing home.
As an NAR Green Designee, I have advanced training in seeking out, understanding, and marketing homes with green features. I can help you separate fact from fiction to make informed decisions regarding green real estate. I can help you see the green potential of a home by pointing out ways to increase energy efficiency and suggest upgrades and fixes will help save your home save energy, add value to your home and reduce your monthly utility bills. Feel free to contact me with any questions about the energy-efficient mortgage and questions about greening your home.
Energy efficient mortgages are not just for home buyers. If you currently own a home and are looking for remodel options or simply making a few cost effective home improvements, then you should consider looking into the EEM assistance. Here in Northern Nevada, NV Energy has many ideas on how you can add value to your home with Energy Star rebates and tax incentives.
A Mortgage That Can Save You Money ~ The Energy-Efficient Mortgage
*Originally posted at myrenosearch.com August 2014 by Terrie Leighton