For the growing numbers of home purchasers who care about energy efficiency, it’s the ultimate “green” goal: Lenders should recognize the net savings that energy improvements provide to property owners and take them into account when they underwrite and set the fees for mortgages. Appraisers should also recognize the added value.
The rationale: Owners of homes that reduce energy consumption pay lower utility bills than owners of energy guzzlers, so why not factor these out-of-pocket savings into calculations of household debt-to-income ratios and appraised valuations? This might permit larger mortgage amounts for energy-efficient homes and help qualify more first-time buyers who are now frequently rejected on debt ratio grounds.
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