For many, building and owning a green home is the ultimate dream. It is important that modern housing be ecofriendly, but sometimes financing these changes can seems daunting.
Whether you’re thinking of building a new home, or preforming ecofriendly updates to your existing home, take heart, the financing is possible.
Here is some information about how to finance an environmentally friendly home.
Get a Construction Loan
Home construction loans are short-term loans designed to help borrowers build their ideal home. These loans can help you purchase land as well as finance the construction of your new, environmentally friendly home.
There are different types of construction loans.
One type is called a construction-to-permanent loan; it allows borrowers to receive funds to construct their home, and it eventually morphs into a mortgage.
Another type is called a construction-only loan; it allows borrowers to obtain funds to build a home.
If you’re thinking of green updates to your existing home, a cash out refinance can help to make cash available to you for the updates.
Assess your financial state, and think carefully about the type of construction loan that can help you meet your green home goals.
Note the Differences
The process of financing a green home differs from that of financing a traditional home.
When acquiring a construction loan, you must think about using the funds to buy a sustainable site–a site where the home placed within it yields a minimal amount of environmental impact.
These sites are usually not near areas where most conventional homes are located, such as farmlands and major roads, so you may have to spend some extra time looking for a lender willing to offer you a loan to purchase such a site.
It is also worth noting that, in order for your home to meet the criteria for being environmentally friendly, it will likely need to be equipped with certain features, such as low-flow fixtures and structural insulated panels, that are not present in most commonplace homes; thus, you may need to request a higher amount for your construction loan than the average borrower.
Save Money in the Long Run
Though you may recoil at the thought of spending so much money for the initial construction of your green home, it is worth mentioning that you will save money in the long run.
It is true; most green homes are more costly than traditional homes. Many environmentally friendly places of residence have expensive equipment such as solar panels and geothermal heating systems; moreover, many of them are made of recycled or reused material that can be hard and costly to acquire.
Nonetheless, there are long-term financial benefits to spending so much money to build a green home; your water and energy bills will be significantly less than those of most homeowners, allowing you to save a good deal of money monthly and annually.