One of the major considerations for any property owner—whether they own and are improving an existing property, or are having a brand new property built—is financing. This will be a major factor in determining what type of property the individual or business can afford to build, or the scope of renovations they will be able to make to their current property.
Most property owners will need to borrow money in order to build or renovate a home or business. The terms and conditions of the loan they are able to get will play an important role in their plans from that point on, and may even be the deciding factor in the matter of whether they can even afford to build or improve the property at all.
Today, most property owners are worried about saving money, specifically when it comes to utility costs. Reducing energy consumption also helps the property be more earth-friendly, which is another top priority for many people. The good news is, there are special types of mortgage loans available to properties that feature significant energy efficient features or building tactics.
These special loans are commonly referred to as energy mortgages. There are two types of energy mortgages, although both are based on the same basic idea of offering favorable financing terms or loan savings based on anticipated energy savings.
An energy improvement mortgage involves an existing property. The loan is reduced or credited a certain amount as a result of energy savings realized by home improvements that will make the property more energy efficient.
An energy efficient mortgage is generally related to new construction. The utility savings allowed by the energy efficient property is included in the estimated value and may boost the buying ability of the borrower.
These energy efficient mortgages are a double-win for borrowers. They allow the person to borrow more money than they might be able to otherwise, allowing more wiggle room in the debt-to-income formulas involved in mortgage approvals. In addition to qualifying for a larger loan, the borrower also gets a more energy efficient property that will allow them to enjoy ongoing, continuous savings in the form of lower utility bills. Not to mention, the energy efficient features also generally make the living space much more comfortable.
The energy efficient improvements or features made to the property will also boost its overall value, which is important for a variety of reasons, particularly for property owners who may be planning to sell at any point in the distant future.
In the case of an energy improvement mortgage, this loan (and the attractive terms that go with it) may allow the property owner to keep a home they may have otherwise considered selling. Particularly in the case of an older, inefficient home, making these energy efficient upgrades can make a huge difference in the comfort and livability of the property, while also making it more budget-friendly.
The key thing to remember here is the importance of planning ahead. Of course, proper planning is critical for any type of construction or home improvement project anyway, so this shouldn’t be a lot of additional effort. But with this type of mortgage, the energy savings as a result of the particular type of insulation or other energy efficient features must be taken into consideration when attempting to qualify for financing. This means that all of the particular details must be ironed out and confirmed before the project starts (and before the loan terms are finalized).
Your options with regards to an energy mortgage will depend on the lender and type of loan program involved. The availability of energy-related mortgages through a conventional loan program will depend on the lender. Energy mortgages are also available through special loan opportunities offered through particular programs such as those run by the VA or FHA.
One of the types of improvements that are frequently used to qualify for an energy mortgage is the application of an efficient insulating material. Needless to say, spray foam insulation is a very popular and effective choice for this purpose. Spray foam roofing can also be a major help in making a property more energy efficient.
If you have been contemplating buying, building or improving a home and energy efficiency is important to you, an energy mortgage may be very beneficial for you. To ensure you are able to take advantage of the maximum possible savings and get the best financing terms, you must research all of the aspects of these loans and educate yourself about them very early in the process. You can ask your lender or contractor for information, or look online for lenders that specialize in these types of loan programs.
Contractors who want to help their customers complete the upgrades or building features necessary to qualify for energy mortgages can find all of the spray foam equipment they need at Intech Equipment & Supply.