Green Mortgages

November 6, 2007

An increasing number of mortgage lenders are offering exceptionally favorable terms to home owners and buyers who incorporate environment-friendly features in their home. They are joining the "green" trend, favoring applicants who make energy-efficient improvements. These special loans are sometimes called "green mortgages."

For example, one major lender has launched a program that offers $1,000 off closing costs with its energy-efficient mortgage through the end of this year. Another national lender offers an Energy Credit mortgage that gives borrowers a $1,000 credit toward closing fees on homes that meet efficiency requirements set by the government’s Energy Star program.

Many of these energy-efficient mortgage products are structured like traditional adjustable or fixed-rate loans, but they incorporate the cost of energy-efficient improvement, such as insulation, windows and cooling systems, into the mortgage so customers can pay the cost over the life of the loan. When customers want to buy a home, they have an energy audit done by a certified third party that evaluates the home and creates a list of energy-efficient improvements that can save the homeowner money on utility bills.

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