Cool Discounts - Green Mortgages Reward Energy Efficiency
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Cool Discounts
Green Mortgages Reward Energy Efficiency
Green mortgages, considered difficult and daring when first introduced in the late 1970s, have become the darling of major national lenders. Bank of America, Citigroup and JP Morgan Chase are now awarding bigger loans and discounts to homebuyers making energy-efficiency improvements to their houses. They’re following the lead of some small lenders who got in the spirit of things after Fannie Mae made green loan paperwork compatible with standard industry software in 2003.
The nut of the idea is that borrowers can afford bigger mortgage payments if they’re saving money on their energy bills. The National Association of Realtors notes that an energy-efficient home can save an owner one third to one half on home energy costs. For example, The Wall Street Journal’s Sara Schaefer Muñoz quotes Mark Wolfe, executive director of the Energy Programs Consortium, as figuring that the $600 a homeowner is set to save through energy-efficient utilities in his new home would allow him to borrow an extra $10,000 in a 30-year mortgage.
The "green mortgages" option also encourages builders to construct more eco-friendly houses, since they know favorable mortgage products will entice people to buy them. Surging energy costs are expected to spark greater demand for green housing.
