Below is a guest post from Patrick Merryman from Total Mortgage Blog on Energy Efficient Mortgages. This post originally appeared on Wendy Brandt Martinenas’s blog, Snappy Green. Wendy is an associate in our Fairfield/Southport office in Connecticut.
At this point in anyone’s life, the term “going green” has become a familiar phrase. If you are aware of the term, chances are that you are also aware of the numerous benefits that come with going green, whether it is better health, lower utility bills, or the feeling of knowing that you are helping to earth and its environment in a positive way. If the green lifestyle is something that interests you and you enjoy the idea of helping create a better tomorrow, an Energy efficient mortgage (EEM) may be for you. It is a great way for you to go green in aspect of your life you may not have considered before.
In order to qualify for an Energy Efficient Mortgage, the property you are interested in must first get a Home Energy Rating Systems Report. This report will be prepared by a professional Energy Rater, and will factor the current appliances, building materials, local climate and utility rates in order to rate your home and calculate energy costs. The house will then receive a rating, on a scale of 1-100, the lower the score, the more energy efficient the home. The report will also cover potential upgrades to your home, and a new score based on those upgrades.
The next step is to begin speaking with a loan officer. Tell him that you are interested in an Energy Efficient Mortgage, and he will be able to help you find the right type of EEM for your needs. EEMs are available through FHA and VA loans, but are sometimes offered through more traditional means.
When speaking with the loan officer, he will take into account everything that was included on your Home Energy Rating Systems Report. When looking at this report, he can determine if the savings from the potential energy saving upgrades will lower your monthly expenses. If this is the case, then you will most likely qualify to add these funds to your loan in order to make the upgrades.
Financial Benefit of Energy Efficient Mortgages
Going green is often considered pricey, but getting an energy efficient mortgage may actually put money back in your pocket. For instance, say you are interested in an energy efficient home that is more expensive than the other homes you have been looking at. The energy efficient home has average energy bill of around $90 a month, while the other houses average around $140. The energy efficient home has a mortgage of $1,040 and the other house costs about $1,000 a month. When you add the energy bills plus the mortgages, the energy efficient home is $10 cheaper a month. This may seem inconsequential but it adds up over time.