A Comparison of a Standard Mortgage to an Energy Efficient Mortgage

Banks are increasingly recognizing the fact that a homeowner who spends money to improve the energy efficiency of their home ends up having extra money in their pocket at the end of the month – and this can help tip the balance in your favor of getting a higher mortgage amount with an Energy Efficient Mortgage.

Fannie Mae has published the following comparison of a standard home mortgage to an energy efficient home mortgage. Keep in mind this was published a while ago and mortgage rates are even LOWER right now, so your savings could be higher.

 

Non Energy Efficient Home

Energy Efficient Home

Purchaser Price

$200,000

$203,000

Borrower Contribution

$6,000

$6,090

Loan Amount

$160,000

$162,400

Interest

5.85%

5.85%

Monthly PITI

$1673

$1698

Average electric Bill

$186

$93

Total Expenses

$1859

$1791

Qualifying Income

$49,000

$48,584

Monthly Savings

 

$68


Note this example also assumes a builder will charge more for an energy efficient home, but as competition increases and technology improves this is becoming less of a factor. Again, this means your savings could be even higher!

To reiterate from a previous post, some of the benefits of using an Energy Efficient Mortgage include the following:

  • More first-time buyers can qualify for a mortgage
  • Overall reduction in the cost of home ownership
  • Helps reduce America’s dependence on foreign oil
  • Helps protect the environment

For more information, check out the Fannie Mae web site about Energy Efficient mortgages and don’t forget to browse my CyberGreenRealty.Com web site for energy efficient homes currently for sale in Massachusetts.

-TMC

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