What is Mortgage Insurance and How/When to Eliminate it
September 30, 2019
Don’t Drown in a “Bad Mortgage”
October 15, 2019

According to a recent article by Scientific America, current human activities are pushing our planet toward a “tipping point” that may cause “sudden, irreversible changes” in environmental conditions that have allowed civilization to flourish on Earth. In other words, we had better make some substantial changes soon towards protecting our planet. The good news is that you can make a big difference with just a few little changes. For many people, it starts at home.

Conventional Loans for New Home Buyers

If you’re considering purchasing a new home, you might find a home that suits your budget but isn’t up to the environmental standards you like. For example, maybe it doesn’t have ENERGY STAR rated windows or energy-efficient heating and cooling. Alternatively, maybe you wish it had solar panels. Energy upgrades can sometimes be costly. The good news, though, is that the government offers energy efficiency incentives that you can apply to your conventional 15 or 30-year mortgage, called an Energy Efficient Mortgage (EEM).

How Does and EEM Work?


To be approved for an EEM, you’ll first need a home energy assessment through the U.S. Department of Housing and Urban Development.

That assessment involves:

  • Recommendations of energy-saving upgrades for the home
  • An estimate of the money each improvement will save in energy costs
  • An approximation of the total cost to make each improvement.

When the mortgage lender receives the energy report from HUD, they can use the information to determine how much each improvement could save the homeowners. Ideally, the borrowing power of the home buyers can be increased without additional down payment funds required. HUD considers energy improvements “cost-effective” when they save the homeowner as much, or more than the initial cost of the upgrades.

What are the Benefits of Going Green?


The knowledge that your helping preserve our planet through energy-saving upgrades is often gratifying enough. However, there may be other financial benefits to having a more eco-friendly home. According to HUD, you might receive a larger tax deduction with the EEM because the interest on a mortgage is generally tax-deductible (depending on your unique situation). It might cost you less money than having to pay for energy upgrades with a credit card, cash, or bank loan which are typically not tax-deductible.

Also, the energy-efficient upgrades might make you eligible for a higher loan-to-value ratio on your home loan and help you qualify for a higher mortgage. Because ultimately going green will cost you less money in the long term and also likely add value to your home, an EEM offers a way to take immediate advantage of the improvements.

Paperless Billing

One last way to go-green is by choosing paperless billing and auto-pay options if available from your mortgage servicing company. It can also save you time.

Primary Residential Mortgage loves the planet, and we appreciate your concerns about helping the environment. If you have questions about going-green or anything else having to do with home financing options, please give us a call today.

Note: Opinions expressed are solely my own and do not express the views of my employer