Green Remodel Forum

Our house needs some work done. We are planning for a "green" remodel. We think our jobs are secure. But we have problems to get the banks to refinance our house. Does anyone have the same problem?

Many people have difficulties getting new mortgages and refinances nowadays. Before the financial crisis, people could qualify for any amount of mortgages and refinances as long as they could breath. Now things have changed. Just the past two years after the housing bust, even with federal government bailout, hundreds of banks disappeared in different states. They were either bought or took over by the larger banks or federal government. The larger banks could survive because the federal government bail them out more and gave them more support because they were too big to fail. The larger banks survive, but they could have collapsed if not for the federal government's help.

After the banks got burned so severely, now they are hoarding the cash. The rules of lending money is a lot stricter than before the financial crisis. Before the crisis, the bank would lend you money without income verifications (yes, you could fill in any dollar amount of your income, the bank would not bother to verify it), no down payment, credit score with 540, inflate home prices appraisal, easy money. After the crisis, they become very strict. They verify everything, the credit score minimum is 640, 20% minimum down payment, home prices appraisals are low. With all these restrictions, the banks, now, are only lending to 30% of all applications. That is why so hard a get a mortgage or refinance now.

you may want to try FHA's Energy Efficient Mortgage (EEM). The program helps homebuyers or homeowners save money on utility bills by enabling them to finance the cost of adding energy efficiency features to new or existing housing. Make sure you get a FHA's approved lender. For more information about EEM program, go to http://www.hud.gov/offices/hsg/sfh/eem/energy-r.cfm Good luck!

Thanks for all the information. I applied for the EEM shortly after your respond. I hope I can get approved to refinance. The mortgage rates are so low now!!

Yes, mortgage rates are so low that if anyone plan to refinance, they should take action now! The rates have been hovering around 4.6% in the past few weeks. They haven't been this low for a long long time.

The mortgage rate is record low 4.41% as of 8/13/10. The interest rate have not been so low since 1950's. If you have been thinking about refinance, this is the time. Since interest rate is so low you may want to take cash out and do some remodeling that you've been waiting for. With this tough economic time, very few homeowners are doing remodels. Building materials and labor are less expensive.

The record low mortgage rate is only 4.33% today. I hope someone is taking advantage of it.

No matter how low the rates are. If you don't have a job you can't take advantage of it. If you are worried to lose your job, you don't want to buy a house now!

True, if you are worried about your job security you don't want to buy a house now. But if you think your company is doing fine, your job is secure, and you don't own a home now, this is the time to first time home buyers. There three reasons to buy now: (1) Mortgage rates are historically low. (2) Home prices are 40-60% off from the peak of 2005 - 2006. You can get a great price if you buy a foreclosed home. (3) There is a huge inventory out there. You have so much to choose from.

We are thinking of buying a foreclosed home, and I know it will need a lot of work. We are planning to fix it up "green", such as insulation, energy star appliances... The banks are so tight with their loans. Is there anywhere we can get a mortgage which is affordable?

There is an Energy-Efficient Mortgage Program (EEM), one of many Federal Housing Authority programs that insure mortgage loans to encourage lenders to make mortgage credit available for first-time homebuyers with reduced interest rates. The lenders offer more flexible lending terms can be provided for borrowers who make energy efficiency improvements resulting in significant energy savings.