More buyers and current homeowners are weighing the merits of a “green” mortgage, according to U.S. News & World Report.
Energy-efficient mortgages allow homeowners to roll the cost of “green” home improvements – such as solar panels, geothermal heating, tank-less water heaters and more energy-efficient heaters or air-conditioning systems – into their mortgage financing.
Fannie Mae, the Federal Housing Administration (FHA) and the Veterans Administration (VA) offer loan programs that include energy-efficient mortgages. On FHA loans, the cost of improvements usually can’t exceed 5 percent of the property’s value and is capped at $8,000.
With VA loans, veterans can usually add up to $6,000 in energy-efficiency improvements. On conventional loans, funding for energy improvements is often capped at 10 percent of the appraised value of the completed property.
Lending experts warn borrowers to be careful and make sure they’re comfortable with the higher monthly mortgage payments spurred by a bigger loan. But over the long-term, the decrease in a home’s energy costs may make up the difference. In fact, many lenders won’t even process an energy-efficient mortgage unless it will result in a net cost savings. Read full article HERE
