Make Energy Upgrades Part of Your Refinancing
As the real estate market begins to come back every mortgage broker and real estate agent should be talking to customers about adding energy upgrades if they are refinancing or changing properties. If you are touching your mortgage in any way, now is the time to include the energy upgrades into your plans.
If you are changing properties and moving to a new house get energy upgrades built into the mortgage because it will generate positive cash flow immediately. It’s like buying a rental property and having a tenant in it already. Also, you are borrowing at a lower rate and getting paid back at a higher rate. Adding insulation and tightening the building envelop in older homes will improve your energy efficiency almost immediately.
I recently participated in a panel discussion about energy upgrades and presented the results of a series of REM / Design simulations that showed what the actual savings would be by adding insulation and making a home more air tight. I secured a quote from an insulation contractor for a passive upgrade to a house built in the 1980’s to show what the cost versus savings would be, not only upfront, but over time. It would cost $22 per month in the mortgage but it saved $28 per month in energy costs. These figures are based on today’s energy prices. As energy becomes more expensive, the savings increase. Not only do the upgrades save energy but they also contribute to a healthier indoor environment in the home.
You can never go wrong upgrading an older home to 2009 building code standards because it will enable you to compete with newer, more energy efficient construction when you decide to sell. As I discussed in an earlier blog, if we begin to label homes with energy ratings it is in the best interest of the homeowner to upgrade so they will have a higher energy rating.
With mortgage rates as low as they are, it makes perfect sense to make those energy upgrades now.
Lucas Hamilton is Manager, Building Science Applications for CertainTeed Corporation