Many people are discovering the benefits of ‘green’ mortgage as housing prices and energy costs are simultaneously rising. Going green may make up still a tiny percentage among homeowners and there is still more information to be released regarding the benefits of green mortgages. In the same way, homeowners must be reminded that an energy-efficient home can save them as much as half of their home energy costs. This savings can inevitably benefit them in the long run.
When you hear the word green mortgage, what do you usually think of? This type of mortgage takes into account the efficiency of a home in terms of saving energy. If the borrower’s utility bills are lower, or if it’s intended for investing in home improvements that can lower energy consumption in the home, some lenders offer discount in the standard variable rate. You might be thinking of financing for buying a green home, right? Well, green mortgages are not the kind of mortgage that you apply for when financing a green home.
Other names for green mortgages are Energy efficient mortgage (EEM) or eco-mortgage. Compared to other types of mortgage they are made a little more affordable. So, if you are planning to apply for this kind of loan, you need to have your home rated by Home Energy Rating System. There will be a specialist who will visit homes for sale and energy-audit the property. The person in charge will calculate how much energy is used by your refrigerator, heating and cooling systems and so on. The rating is usually between 1 and 100 and based on the property’s utility rates, appliances, climate, windows and insulation. The closer your score to 100, the more energy efficient your home is and the more likely that the lender will approve your green mortgage.
You might be wondering why this kind of mortgage is becoming popular these days. People nowadays, especially homeowners want to live in a clean and safe environment. They want to live according to their environmental convictions. Another obvious reason is that green mortgage has a lot of benefits. It allows you to purchase a bigger and nicer home where utility bills are lower. Living in a less energy-efficient home can affect your monthly mortgage payments especially if it goes up and down every month.