Energy Efficient Mortgages:
Start Shoveling Money Back INTO the Window
Start Shoveling Money Back INTO the Window
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Alternative-Heating-Info.com
When you buy, sell, refinance, or remodel a home, an Energy Efficient Mortgage (EEM)
will save you money while making your home more energy efficient and comfortable.
An EEM offers additional leverage to buyers of energy efficient homes by increasing the
debt to income ratio to 30% from 28%. This qualifies you for larger loan on a better
home. Your mortgage payment will be slightly higher, but you will actually save money
because your energy bills will be lower.
This win-win formula also applies when you refinance or remodel your home to make
energy saving upgrades.
How do I determine if my current home or a new house I’m looking at is energy efficient?
A Certified HERS (Home Energy Rating Systems) Rater can provide an evaluation of your
home or a prospective home purchase. The RESNET web site provides a Certified Rater
Directory.
A HERS report includes the overall score of the house as is, recommended cost effective
energy upgrades, annual total energy cost before and after upgrades, and the improved
rating score.
A HERS rating usually costs between $100 and $300. This could be paid for by the buyer,
seller, lender, or real estate agent. Sometimes the cost of the rating may be financed as
part of the mortgage. No matter how the rating is paid for, it is a very good investment
because an EEM could save you or your buyer hundreds of dollars each year.
Energy Efficient Mortgages are offered or guaranteed by various Federal agencies. The
FHA (Federal Housing Administration) covers upgrades for new and existing homes and
is now available in all 50 states. The loan amount is $4,000 or 5% of the property value
up to $8,000.
The FHA 203(k) program enables a home buyer or investor to obtain a single loan to
finance both property acquisition and complete major improvements after the time of
loan closing. This can be used in conjunction with the FHA mortgage mentioned above
but the total cost of improvements must exceed $5,000.
The VA Energy Efficient Mortgage is available to qualified military personnel, reservists
and veterans in all 50 states for energy improvements when purchasing an existing
home. This program is also available for VA refinance. Upgrades of $3000 may be
financed based solely on documented costs and up to $6,000 may be financed if
upgrades are deemed cost effective.
You may get a larger tax deduction with the EEM because the interest on mortgage
payments is tax deductible. This can save you more money than paying for energy
upgrades with a credit card, bank loan, or cash, none of which are usually tax deductible.
Your lender will be your best source of information on your own EEM benefits.
Now that you’ve started to shovel money back INTO the window, let me show you two
more piles of cash just waiting to be scooped up.
Many utility companies offer rebates on selected Energy Star Appliances. PG&E of
California offers a $75 rebate on clothes washers, $300 to $600 for evaporative cooling
systems and $200 to $400 on natural gas furnaces.
On top of that, the Federal Government wants to give you a $300 tax credit for a new
central air conditioner or heat pump. How about $500 for insulation and sealing?
Are your arms getting tired from shoveling money yet?
will save you money while making your home more energy efficient and comfortable.
An EEM offers additional leverage to buyers of energy efficient homes by increasing the
debt to income ratio to 30% from 28%. This qualifies you for larger loan on a better
home. Your mortgage payment will be slightly higher, but you will actually save money
because your energy bills will be lower.
This win-win formula also applies when you refinance or remodel your home to make
energy saving upgrades.
How do I determine if my current home or a new house I’m looking at is energy efficient?
A Certified HERS (Home Energy Rating Systems) Rater can provide an evaluation of your
home or a prospective home purchase. The RESNET web site provides a Certified Rater
Directory.
A HERS report includes the overall score of the house as is, recommended cost effective
energy upgrades, annual total energy cost before and after upgrades, and the improved
rating score.
A HERS rating usually costs between $100 and $300. This could be paid for by the buyer,
seller, lender, or real estate agent. Sometimes the cost of the rating may be financed as
part of the mortgage. No matter how the rating is paid for, it is a very good investment
because an EEM could save you or your buyer hundreds of dollars each year.
Energy Efficient Mortgages are offered or guaranteed by various Federal agencies. The
FHA (Federal Housing Administration) covers upgrades for new and existing homes and
is now available in all 50 states. The loan amount is $4,000 or 5% of the property value
up to $8,000.
The FHA 203(k) program enables a home buyer or investor to obtain a single loan to
finance both property acquisition and complete major improvements after the time of
loan closing. This can be used in conjunction with the FHA mortgage mentioned above
but the total cost of improvements must exceed $5,000.
The VA Energy Efficient Mortgage is available to qualified military personnel, reservists
and veterans in all 50 states for energy improvements when purchasing an existing
home. This program is also available for VA refinance. Upgrades of $3000 may be
financed based solely on documented costs and up to $6,000 may be financed if
upgrades are deemed cost effective.
You may get a larger tax deduction with the EEM because the interest on mortgage
payments is tax deductible. This can save you more money than paying for energy
upgrades with a credit card, bank loan, or cash, none of which are usually tax deductible.
Your lender will be your best source of information on your own EEM benefits.
Now that you’ve started to shovel money back INTO the window, let me show you two
more piles of cash just waiting to be scooped up.
Many utility companies offer rebates on selected Energy Star Appliances. PG&E of
California offers a $75 rebate on clothes washers, $300 to $600 for evaporative cooling
systems and $200 to $400 on natural gas furnaces.
On top of that, the Federal Government wants to give you a $300 tax credit for a new
central air conditioner or heat pump. How about $500 for insulation and sealing?
Are your arms getting tired from shoveling money yet?