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August 21, 2017

Going Green? Ask Questions First!

Homeownership

If you're looking to finance energy efficient improvements for your home, we encourage you to do your homework and talk with your financial or trusted advisor about the most appropriate option for you. This conversation is important since some of these financing options can expose you to significant risks — including making it hard to refinance or sell your home — and can come with unfavorable interest rates, fees and repayment terms.

When reviewing your financing options, be sure to ask yourself and your financial advisor the following questions to avoid future issues: 

  • Will the loan be repaid through your property taxes?  If "yes," the loan may be in priority lien position, meaning that it takes precedence over your mortgage.  You'll want to talk with your state tax advisor before taking on such a loan, as you could be violating the terms of your mortgage and the loan can result in repayment terms that will seriously impact the value and marketability of your home.
  • Can I afford this loan and is the repayment plan realistic? As with any loan, you should shop around for a financing option that offers reasonable fees, affordable interest rates and practical repayment terms.
  • Are you being protected? It's important that the company offering the loan has comprehensive checks and balances in place to ensure that you aren't getting a loan you can't afford. 

Learn more about the risks you may avoid by getting clear answers to these questions.

There are several energy efficient financing options that can meet your needs while protecting your mortgage terms and the marketability of your home. Be sure to talk with your advisor about affordable and suitable financing solutions, including those offered by Freddie Mac.

If you've already secured financing through one of these programs, including PACE, you may have options to pay them off and are encouraged to call your lender.

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