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Monday, July 26, 2010

Going Green with Your Mortgage

By: Karen Saley, Extension Specialist

Many financial experts feel now may be a good time to purchase a home. There are many properties available at affordable prices, interest rates are very reasonable, and for those that are interested in bringing sustainable practices into their home buying scenario there are now green mortgages available.

Green mortgages, or energy efficient mortgages (EEMs) take into consideration a home's energy costs when determining how much money to lend a borrower. The idea is that if the borrower's energy costs are lower, more money can be put toward the mortgage payment. The result is the ability to borrow more and possibly get a better house without spending more per month than you would with a conventional mortgage.

An energy audit of the home you're interested in purchasing will be performed to determine the monthly savings. Some of the things that are taken into consideration are how much energy is used by the appliances and the heating and cooling systems, how well the home is insulated, how well the roofing material keeps the house cool in the summer and warm in the winter. The calculated monthly savings on utility bills is added to the borrower's income raising the amount of money that can be borrowed.

Some other features to consider when trying to qualify for a green mortgage are; the size of the home, the use of environmentally sustainable construction materials, energy-efficient windows and doors, water conserving features, renewable energy resources such as solar panels, drought-resistant landscaping, and natural, efficient Insulation. These features do not necessarily have to exist in the home, but could be added after the purchase of the home to still be applicable for a green mortgage.

Keep in mind that green mortgages are not the mainstream, so you may need to do a little searching to find one, but it may be well worth the search to stay true to your sustainable practices and save money too.


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