Agencies offer energy mortgages and loans
If you are
already a homeowner
with a mortgage out or even if you are looking
to buy a home right now, and are constantly worried
about your electricity bill, there is some good news for
you.
Everyone is feeling the effects of the energy crisis,
and conserving energy is absolutely essential during this
time.
According to the article, “Helping finance energy
efficiency: Government, private lenders offer homeowners
energy loans,” by Stephanie I. Cohen, posted on
MarketWatch.com July 30, 2006, these agencies are offering
mortgages
and loans aimed at homeowners who want to reduce energy
costs.
These loans can be used to make repairs that will reduce
the use of energy and electricity in the home.
“As home energy bills soar, government agencies
and private lenders are offering homeowners
thousands of dollars in financing to seal off drafty windows
and purchase energy-saving appliances. These long-term,
low-interest mortgages and loans are aimed at efficiency-minded
homeowners who want to cut their utility bills. Borrowers
can often arrange 30-year loan periods and interest rates
below 10%.”
These loans are a great alternative for people who bought
an older house, with older appliances that are not energy
efficient.
You can use the money to update an air conditioning system
or water heater, so they use less energy.
The program is sponsored by the Federal Housing Authority.
“The average loan for the updated program is between
$18,000 and $20,000. A couple hundred loans have been
administered since the program launched last year but
FHA sees interest among lenders ramping up. The program
offers a way to ‘bring today's energy technology
to yesterday's houses,’ said Doris Ikle, president
of CMC Energy Services, in Bethesda, Md.”
The only drawback to the loans that people may not be
as enthusiastic about is that it could add on a couple
of more weeks to the closing date in order to receive
the funds.
“The process for receiving funds still adds several
steps to a home closing, which can make sellers resistant.
Once a bid on a home is accepted it can take 60 days to
complete the FHA process and reach closing, so finding
a patient seller is helpful.”
“But a softening housing market is likely to boost
the program's prospects. In the absence of bidding wars
and with houses sitting on the market longer, sellers
-- especially those whose houses may not be up to modern
standards -- may be more willing to entertain less traditional
offers.”
So these mortgages
and loans could actually help people sell their homes
quicker, which would be a huge boost for the market.
Since people are realizing how important it is to conserve
energy, many analysts are saying that these loans and
mortgages could become even more popular. Although they
require a little more work, they could end up saving you
a lot of money in the long run.
“Homeowners must have a professional home energy
auditor do an inspection to pinpoint improvements, find
a FHA-approved lender (there are about 2,500 in the U.S.,
although not all participate in this program) and receive
contractor estimates.”
“But Ikle thinks interest in home energy efficiency
is growing. ‘I think people are really taking the
environmental crisis to heart and energy prices have helped
too,’ she said.”
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