This page contains a Flash digital edition of a book.
Although homeowners typically spend much more on energy than on property taxes or insurance, few banks include energy costs as a factor in mortgage eligibility.


 


WHAT ABOUT ENERGY-EFFICIENT MORTGAGES?
The fact that we don’t hear much about EEMs lately may be reflective of the times.


According to writer Jonathan Hiskes at Sustainable Industries, few would-be home buyers tend to take advantage of the special mortgages that take into account a home’s energy, in part because they don’t know such mortgages exist. But there’s another reason. Such mortgages can allow borrowers to carry additional debt, because the energy savings are deducted from the occupants expected monthly mortgage load. But the last thing banks want now are maxxed out clients. They may be missing an opportunity, according to the Institute for Market Transformation (www.imt.org), which reports that “mortgages on Energy Star homes have an 11% lower default and delinquency rate than do comparable mortgages on other homes.”


The idea of rewarding energy-efficient home builders and buyers with special incentives is a good one. But some are arguing that the reward system should be different. Instead of just allowing a buyer to borrow more money, for example, the SAVE Act (see article, page 42) would allow all federally backed banks to offer lower interest rates for green buildings. And small banks around the country are experimenting with various special mortgage rewards for sustainable projects.


Hiskes cites Portland, Oregon-based Umpqua Bank which “recently began offering a credit off closing costs for homes that have received any of a number of green certifications such as LEED, Energy Star, Built Green or the Oregon-developed Earth Advantage. Borrowers can save 0.375% of the purchase price, capped at $1,564. A $300,000 home would get a $1,125 discount.”


Such programs are modest and relatively few at present, but why not approach your local banker and ask them to consider a similar program?


 


AVERAGE U.S. HOMEOWNER COSTS (2007 - 2008)
$2,340
46%
Energy


$1,897
37%
Property Tax


$822
16%
Homeowners Insurance


Source: IMT


09.2011
57

Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76