Why You Should Green Your Home Before You Refinance

Lots of people wonder if this is a good time to refinance, and it's a good question. Today, I'm happy to feature another great post by guest blogger, AJ Earley, who offers a unique perspective for you to consider.

Millions of Americans refinance their homes every year, and it’s no wonder, considering that billions of dollars are lost every year by the ones who don’t refinance. Everyone’s situation is different, and plenty of people pay off the life of their mortgage without ever pursuing a new loan. However, if you’re in a position to actually save money by doing so, it just makes sense to at least check into it. 

If you’re broaching a point in your life where a refinance might be on the horizon, it’s also the perfect time to consider “greening” up your home a little bit. While many people refinance for the sole purpose of using the equity to pay for renovations, there are so many benefits to upgrading your home before you refinance. 

The first is the fact that you will definitely receive a higher appraisal, meaning a higher property value when you go to refinance. Generally, your investment will have a much higher payoff in the appraisal process, but there are a few home improvement projects that have a higher payoff than others. Anything that makes your home more energy efficient, environmentally friendly, “smart,” or generally “green,” almost always falls into this category. Plus, your investment will pay off double if you go the energy efficient route: once when your home is appraised at a much higher value, and again every time you get a tiny or non-existent power bill. I’ve even heard of people getting paid by the power company monthly because their homes created too much energy. 

Image by Kevin Phillips

Another benefit of receiving a higher appraisal rate is that a better refinance deal will result in even more money for you to invest in greening your home more down the road. Say you’ve got your eye on a $75,000 complete solar energy system for your home, but you only have $30,000 to invest. If you invest that $30,000 in other areas, that could result in an appraisal that’s $50,000 to $80,000 higher than your current value, which is more equity that could end up in your pocket… or in the hands of the company selling that snazzy solar system. 

As mentioned before, some home improvements result in much higher valuations than others. At the top of the list of renovations that return on their investment is kitchens. Having an updated kitchen means serious bonus points come appraisal time, but having the latest in energy efficient appliances and technology will boost those numbers even more. 

Window and door replacements are also well worth the money, as both give you a chance to improve the look and energy efficiency of your house at the same time. Both doors and windows have come a long way in the past decade, and they’ll also cushion your wallet in more ways than just a higher appraisal: replacing old windows with energy star rated ones can save you almost $500 a year in heating and cooling bills. If you want to save even more, open up those windows when the weather is nice! 

A fresh coat of paint all around the house, as well as new carpeting or flooring also yields a high return, but make sure you opt for products that don’t contain toxic VOCs (volatile organic compounds.) Generally, hard floors are considered “greener” than carpeting, as they last longer between replacements and require less electricity and cleaning products to maintain, but you can find carpeting made from recycled materials. Bamboo flooring and tiles made of recycled glass are also sustainable (and attractive) options that will increase your home’s value. 

Revival Engineered Locking Bamboo

Adding an additional bathroom, especially to an older home that has a smaller ratio of bathrooms to bedrooms than we see in recent years, is another home improvement project that yields a great return, and it’s also another chance to make your home more eco-friendly. There are so many ways to create a greener bathroom: first off, install a low-flow toilet with a dual flush mechanism to reduce water waste, or even a hybrid where the gray water from the bathroom sink is recycled into the toilet bowl. When it comes to hot water, you can opt for a solar powered water heater or install a waste-heat recovery system, which uses the warm water going down the drain to preheat the rest of the water. You can fight mold and mildew a more natural way by making sure there are windows for ventilation and by using naturally mold-resistant materials like cork, marmoleum, natural clay, and water-resistant woods like cedar. 

Don’t forget that there are also lots of ways to make your home more energy efficient for under $100, and if you’re planning to refinance and want to have a greener home to boot, consider doing at least some of those renovations beforehand and reap the rewards later on down the road.

8 Ways to Make Your Home More Energy Efficient for Under $100

I'm happy to welcome back guest blogger AJ Early, who is offering some great tips on creating an energy efficient home. Click here to read her post on sustainable remodeling.

8 Ways to Make Your Home More Energy Efficient 
for Under $100

There are countless benefits to making your home more energy efficient. The first, of course, is the money you'll save. It's equally important to lessen your impact on the environment through responsible energy consumption. There are also monetary benefits aside from lower power bills. An energy efficient home can help you reap benefits like green tax credits and can even give you access to special types of loans, like energy efficient mortgages.

Consuming less energy in your everyday life does not have to be difficult or expensive. Here are some ways to reduce your usage, sorted from cheapest to most expensive. Even taking one small step can make a huge difference, and I'm willing to bet there's at least one thing on this list that is feasible for you.

Image courtesy of Peter Griffin

1. Free: Unplug your electronics when they're not in use. This sounds tedious, but unplugging things like device chargers and televisions when they're not being used can help your home cycle energy more efficiently. Plus, you'll save money!

2. Free: There are a whole bunch of ways to save energy when cooking. Only preheat your oven for five minutes, and leave the door cracked when you're done to help heat the house during winter. Glass and ceramic are much more efficient materials for baking, and a toaster oven is always more efficient, if it fits. When cooking on the stovetop, use a heating coil that is about one inch smaller than your pot and use a lid to trap heat in.

3. Free: Take the screens off your windows during the winter. This will only be a short time investment twice a year, but will help more sunlight penetrate your windows during the cold winter months. Doing this can actually raise the temperature in your home by a few degrees on sunny days.

Image courtesy of Shari Weinsheimer

4. Free: Ease into a comfortably warm winter and still reduce your heating bill by following these recommended thermostat settings: Find whatever temperature is ideal for your family and start there. Stay there until you're used to the colder weather, then reduce the thermostat by one degree each week. You won't notice such a gradual change, but you will notice a much lower power bill.

5. Free: Dust and vacuum the coil and fan behind your refrigerator every few months. Dusty build-up can disrupt air flow and slow down the moving parts of your fan, which results in higher energy consumption. The only cost is the electricity used to run the vacuum for a few minutes.

6. $5 - $20: Change your air filter. Depending on where you live, your HVAC system runs most of the year to maintain a comfortable temperature in your home. Keeping the air filter clean and fresh is an important part of ensuring that your heating and cooling systems run efficiently.

According to energystar.gov, you should replace your air filter every month, especially during heavy usage.

7. $10 - $50: Adding weatherstripping (a sticky-backed foam tape that is easy to apply) to your windows and doors can make a huge difference, especially if your home is older. In a newer home, windows won't need any help, but you can still benefit from sealing your door frame and the area underneath your door. Weather stripping can be found for as little as $1.50 a yard, which makes it one of the most cost-efficient ways to optimize your home's energy consumption.

Image courtesy of Summer Woods

8. $15 - $50: Seal your switchplates, electrical outlets, escutcheon plates, and anywhere pipes or vents enter your home. For the outlets and switchplates, you can find inexpensive foam sealers at the hardware store and secure them to the wall with a little caulk. They fit right under your existing outlet covers and keep cold air from leaking in. Take it even farther by using baby-proof plastic plugs in the outlets you're not using. You can seal your excutcheon plates (the round covering where a pipe comes out of the wall) quickly with some caulk. Spray foam is also very cheap and can be used to seal any area where pipes or vents enter or exit your home. Sealing all these little areas of your home will drastically reduce your energy usage. The following simple infographic can help you identify areas in your home that could use some help.

Courtesy of American Chemistry Council, Inc.

Click here for 2 more great tips on saving energy and money in your home.