A look at Energy Efficient Mortgages

As temperatures outside continue to drop, your heating bill will go up, but there's a way you can save money on your home heating costs. It's called the "energy efficient mortgage," and it's made possible by the Fannie Mae.

Here's how it works: homebuyers who make improvements to their home to conserve energy, lender adds those costs to your mortgage. It does increase the amount of your monthly payment, but experts say that increase costs less than your utility bill.

Joel Wiese, Priority Mortgage Corp: "Not only are you doing something which is good for your pocketbook, but you're also doing something which is good for the environment."

We spoke with a woman who says that she and her husband grew tired of throwing their money away on apartment living, so they decided to make an investment in a new home. She says the improvements they made to the home should also save them money in the long run.

Though Imelda Ramirez and her husband were looking to save money on a new home, in the beginning, she says her energy bill was the last thing on her mind.

Imelda Ramirez: "We were looking at the price and neighborhood, and the size of the home."

But when they found out about the energy efficient mortgage, she says it was a deal the couple couldn't pass up, but first they would have the home inspected to find places where heat would escape, and have those spots sealed up. Then they needed to make one major improvement, replace the old furnace.

Imelda Ramirez: "It was loud, not efficient, (and had an) old thermostat."

With a new furnace came a brand new more efficient thermostat that switches heat sources between gas and electrical using less energy.

Imelda Ramirez: "Whichever is cheaper, it decides for itself."

Although they've invested $5,000 in repairs, she says she'll save about $1,400 each year living in a more comfortable home.

Imelda Ramirez: "It's really nice and cozy."