From Guest Blogger Michael Ciocca: Energy Efficient Mortgages for a Green Home

As the green lifestyle becomes more popular, it should come as no surprise that more programs and incentives are being offered to help people convert. An Energy Efficient Mortgage (EEM) is a lesser known service that can be a real help to homeowners looking to refinance or those buying a new home. It allows them to finance energy saving upgrades right into your mortgage. This is perfect for people who are interested in adding solar panels to their home, upgrading old windows and insulation, and exploring alternative heating solutions. If it will save you energy, it can most likely finance it through an EEM.

The first step to qualifying for an EEM is to find an appropriate lender. Most EEMs are financed through the Federal Housing Authority or Veterans Administration programs, but as they increase in popularity more lenders are offering them directly. When searching for a lender, keep an eye on the current mortgage rates to make sure that you are getting the best deal that you can.

Once you are qualified for a traditional mortgage, it’s time to talk with a professional energy auditor. Finding a credible auditor can be tricky, but luckily energy star has a list of partners to make it easy. Once you locate your auditor, he will come out to your home and run a few tests. After the tests are complete, he will give you a Home Energy Rating Systems Report (HERS). This report will score your home on a scale of 1-100. The lower your score on this test, the more efficient your house is. Also included in this report will be a list of suggested upgrades.

The next step is to begin speaking with your loan officer again. The HERS report plays a vital part in qualifying for the EEM, as your loan officer will look at all of this information when deciding how much more money you qualify to borrow. Most lenders will qualify for somewhere between 5-15% of the home’s value in additional funds.  Once you qualify, it is a good idea to speak with your auditor again. He can help you choose the best way to spend the additional money you have received.

There are a few additional benefits to getting an EEM other than just lowering your impact on the environment. The first is that some people end up lowering their energy bills enough to be spending less money overall each month, despite a higher mortgage bill.  Another benefit is that once your mortgage is paid off, you will continue to see savings from the energy efficient upgrades you added to your home. Finally if you ever decide to leave your home, the upgrades you made add value to the home and allow you ask for a higher price.

Going green can be a financial burden and hard to accomplish, but with an Energy Efficient Mortgage it can be affordable and easy!

Michael Ciocca is an author for Total Mortgage Services.