This week we will be getting estimates for all the phases of our project. With our personal homes we have a lot of sweat equity. This skews our numbers quite a bit. When I talk about our budget, I will be using real numbers, instead of what it is actually costing us.
The appraisal on our house, which was based off our house plans, was $370,000. With a standard 80/20 loan, we could borrow $296,000. There are options now with energy efficient mortgages (EEM), which let you add some of the extra cost of energy efficient products into your loan. For example, if your maximum amount loaned was $296 but you were going to use a geothermal heat pump, which could cost an extra $10,000, before the 30% tax credit, using an EEM could raise your loan to meet this higher amount. Go to the EEM Program website for more information on eligibility.
Our initial goal for our budget without land is $250,000. With a total loan of $280,000 for 15 years @ 4.875% or monthly payments would be $2,200. Since we plan on using the highest efficiency products throughout the house, geo-thermal, Sip exterior walls, and low-flo fixtures, we figure we will save around $2400 a year or $230 on utility bills. With this savings, we could spend an extra $40,000 and still have the same overall payments. This would make our end loan $336,000.
If we used this method of thinking we would be $24,000 over our 80/20 loan amount. This is where having programs like EEM loans and EE tax credits make it a little more feasible to get your loan and be green. Also, if Appraisers were required to add value to houses that used EE products, EEM would not be needed. This is something the NAHB has been fighting for awhile. If a house used geo-thermal, that alone, with no other improvements, could save you between $1000 and $2000 a year. Doesn’t that make the house more valuable?
One of the lessons we will be learning from our house is what products give you the most return on your investment (ROI). If your goal is too purely save the environment then throw ROI out the window, there are thousands of products that have very little impact on the environment, unfortunately most have a big impact on your wallet. There are plenty of products that are green and save you green. This is what we will be getting from our house, the real world knowledge of the products we use and how they will benefit our customers.
We will talk over the next few month’s about the pro’s and con’s of the products and systems we use. I encourage anyone that is thinking of building or remodeling to keep updated on our blog, but also use the internet and other resources and study the products before you use them and pick out the right system for your needs and not your contractor.
Have fun with all your projects, pick a contractor with your same goals and ideas, and try to be green, it usually won’t cost you too much.
To see update plans of our Emerald House and other projects please visit us at www.stepoffthegrid.com
