Green Mortgages

So you'd like to lower your screamingly awful utility bills and help the environment by installing double-paned windows and ceiling insulation, but you don't know how on Earth to cover the cost right now, even though the improvements eventually pay for themselves and then some? One possibility is to refinance your house with a “green mortgage.” Or you could buy an already-energy-efficient home with a “green mortgage.”

A green mortgage is simply a type of mortgage that provides you a money-saving discount or a bigger loan than normally permitted as a reward for making energy-efficient improvements or for buying a home that meets particular energy-efficiency standards. That way, it's easier for you to qualify for a loan. Green mortgages hinge on the principle that a more energy-efficient home means lower utility bills and, as a result, greater income, qualifying a prospective homeowner to buy a more expensive house. Officially, the mortgages often are called Energy Efficient Mortgages (EEMs) or Energy Improvement Mortgages (EIMs).

Example: When Patricia and Mynette Theard bought a home, their lender made it possible to add ceiling, floor and furnace duct insulation by adding $2,300 to their loan -- bumping it from $142,500 to $144,800. That raised their monthly mortgage by $17, but their utility bills dropped by $45 monthly.

To get a green loan, inquire at local lenders.