Curious About Green Mortgage Lending?

How does the green initiative factor into green mortgage lending? Mortgage lenders are able to give larger loans to homebuyers that upgrade their new home to more energy efficient equipment. There is also another way in which green mortgage lending can be designed and that is by discounting rates or fees for a home purchase that has already been energy efficient certified.

Energy Star Green Mortgage Lending

The Environmental Protection Agency uses an energy efficiency rating system known as Energy Star. The rating is used to determine how efficient a home, water heater, furnace or other appliances in their energy use. Green mortgage lending takes these ratings into account and are able to offer better mortgages and incentives for homebuyers and homeowners. In fact, discounts are mandatory either in the form of covering closing costs or reduction of interest rates in order to offer green mortgage lending.

Qualifying for Green Mortgage Lending

Homes have two options in being able to qualify. The home will need to be upgraded to meet the standards or the Home Energy Rating System and then have a certified energy rater inspect the home. Inspectors generally charge one hundred to three hundred dollars and this may sometimes be covered by the realtor or lender. The fee can also be built into the mortgage.

Where are the Green Mortgages?

There are a lot of benefits to getting a green mortgage, but the one setback is that not a lot of lenders actually offer green mortgages. Lenders have found that these types of mortgages are more difficult to sell because they are not very well known mortgage products and the processing time is much longer than traditional mortgages. This however, can be a benefit to a well-informed mortgage consumer. If you find a lender that is familiar with green mortgages and the process involved, then it can go very smoothly and you can reap the benefits of the rewards.

It may take more research to find a mortgage lender that is familiar with the program, but once you do, you can save thousands of dollars on your mortgage. Another benefit of qualifying for a green mortgage is that supplies and equipment needed to upgrade aspects of the home may sometimes be discounted when working under an energy efficient mortgage. Contractors that work on homes that are backed by a green mortgage also receive incentives and can offer their improvement services at lower prices than they do to homes that do not have a green mortgage.

Energy efficient homes can save around $1000 a year in energy costs. They are great for the homeowner, community and the nation. Hopefully, more lenders will begin offering these mortgage products so that homeowners can benefit from helping the planet. To find a mortgage lender that offers green mortgage lending in your state, you can check with state websites or with local lending companies. The state housing and finance agency is also a great place to start in your search.