Green Mortgages – Saving the Planet and Your Wallet

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If you’ve never heard of a green mortgage, you could be missing out. This method of financing improvements to your home’s energy efficiency can actually cut your monthly utility bills by nearly half, and may put you in a position to receive better mortgage rates.

In addition to being good for your wallet, it also just happens to be great for the environment. Would you like to become a financially-savvy, energy-efficient homeowner? Here’s what you need to know.

How do green mortgages work?

Green MortgagesEssentially, a green mortgage is a modification to your loan by a loan officer that gives you more financing to invest in energy efficient changes to your home.

If you’re asking yourself why in the world you would want to take on more housing debt, think of it this way: your green mortgage may raise the total dollar cost of your home, but it also frees up monthly income for you to put toward a higher mortgage.

Adding several thousand dollars to your home loan is not a decision to be taken lightly. However, your monthly utility expenses could decrease by as much as 45 percent, which makes the trade-off well worth it.

This means that you can pay off the extra amount sooner than you would be able to pay off $3,000 worth of your mortgage before these home enhancements. And after that, you will be on the fast track to paying the rest of your mortgage before you initially expected.

What kinds of improvements can I implement with a green mortgage?

Energy efficiency improvements come in all sizes. Adding extra insulation and caulking around windows and doors are relatively inexpensive ways to lower your heating costs.

Another popular way to get more for your energy expenditures is to shop for Energy Star appliances, or use another method approved by your lender for choosing energy efficient products.

What do I have to do to get a green mortgage?

There is often very little difference between the process of getting a traditional mortgage and the process of securing a green mortgage. The only added requirement for the homeowner is to schedule an energy audit. This may take extra time and cost more money (to the tune of around $300), but your loan officer can inform you about extra incentives that will help cover the audit fee.

Are there any additional financial incentives?

There are financial incentives for getting a green mortgage at both ends of your home financing contract. Initially, getting a green mortgage boosts your purchasing power when it comes to choosing a home that you can afford because your expected utility savings are considered as additional income.

Green mortgages also often qualify for some of the best mortgage rates. And after you pay off your mortgage, you can absorb all of the savings that you previously put toward your payments, meaning that you’ll have wiggle room in your budget to invest in retirement savings or other home improvements, for example. In addition, having a green mortgage could potentially help you pay off your mortgage sooner, if you do the math on your monthly budget.

At the end of the day, getting a green mortgage is all about efficiency because it empowers you to invest your money in the most efficient manner. But it also enables you to get the most out of the energy that you use at home so that you can also rest assured that you are taking positive steps toward environmental conservation in the process. No matter how you look at it, getting a green mortgage is a winning situation.

Filed Under: Green Living

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