Energy-Efficient Home Improvements Worth Every Penny

Energy-saving home improvement projects are fast becoming one of the most popular home improvement undertakings on the market. They aren't cheap, however. Installing energy-efficient furnaces and air conditioners, improving insulation and replacing old windows with more efficient varieties can cost a pretty penny, leaving many homeowners asking themselves whether shelling out all that dough is really worth it.

The Answer is Yes
It may take a bite out of your savings, or even require you to look into financing to pay for it, but these projects are a no-brainer from a financial standpoint. Take the examples above: Installing energy-efficient furnaces and air conditioners can cut down on a home's energy consumption by 50%, and new energy-efficient windows can save a homeowner $300-$400 a year. Extend those savings a few years down the road and it's easy to see that these home improvements quickly pay for themselves.

Why Stop with the Little Stuff?
Of course, furnaces and double pane windows are only scratching the surface anymore. Green building has moved from the fringes to center stage when it comes to large-scale home improvement projects and home building, meaning even larger investments are possible and in order. From solar energy to energy-efficient architectural design, you still can't go wrong if you choose to make a substantial investment in energy-efficient living.

How am I Going to Pay for It?
Now we're back where we started. As has already been mentioned, energy-efficient home improvement isn't cheap. This is a front loaded investment with huge returns down the line, but you've still got to figure out how to pay for it now. If you're lucky you've built up a substantial nest egg that you know you'll be able to replenish quickly with money you save energy wise. Barring that, however, financing your project is the best way to go. Borrowing money may make you uneasy at first, but remember, these are investments that are going to add value to your home and that are going to pay for themselves in the long run. In the end, you're borrowing money to make it.

For Smaller Projects
For more modest energy-efficient home improvement undertakings, look into unsecured financing options. You don't need a lot of equity to secure these loans, making them perfect for new homeowners or homeowners who want to preserve the equity they already have. And because small loan amounts are more easily paid off in shorter amounts of time, the higher interest rates that are common with these loans won't hit you so hard in the long run. Homeowner loans, contractor financing and even credit card financing are all places a homeowner can turn to find unsecured financing for energy-efficient home improvement projects.

The Bigger the Better
If you're looking at a bigger renovation, such as a green addition or installing solar energy panels to your home, you'll probably want to obtain secured financing if you can. Secured loans are loans that are secured against a tangible asset, usually the equity you've built up in your home. As a result, they usually have lower interest rates and can be drawn out over longer terms, both of which lower your monthly payments and make larger scale home improvements reasonable for an average homeowner. Cash out refinances, home equity loans and home equity lines of credit are all examples of secured loans commonly used for financing larger energy-efficient home improvement projects.