Lehigh Valley Real Estate Blog, Home Buying & Selling Information

100% Home Financing Gone Away

Lehigh Valley Home Financing

The plug has been completely pulled on getting a home mortgage for 100% financing. This is across the mortgage industry. PMI (principle mortgage insurance) is no longer available for these loans so mortgage companies/brokers can no longer offer 100% financing to perspective home buyers.

The closest thing to 100% financing is a mortgage for 97% of the purchase price. This was typically only available using an FHA loan but is now available with other loan programs.

Why would you pick one over the other? An FHA loan requires an FHA appraisal which can make certain repairs a part of the negotiations since any reported problems must be corrected before the closing.

If you pick one of the other programs, negotiations are only between the buyer and the seller.

Most of the available loan program allow for 3-6% sellers assist (or concessions). The particular program you are involved with sets the limit and this knowledge is needed when making an offer on a house if closing costs are a concern.

Bethlehem - Lehigh Valley Homes Sales Affect School Taxes

The Morning Call had an article on Tuesday stating that the Bethlehem School District warns of a big tax hike within the next two years. The school district says that this tax hike is needed because of the slow housing market. The factors:

1 - the 2% transfer tax charged to the home buyer and seller (1% each) is not generating as much income since home sales have slowed down

2 - houses have not been reassessed since 1991, so anyone that owns an older house is not paying their fair share (since house values have almost doubled since then)

3 - mortgage companies are not sending in the real estate tax payments that are typically escrowed by the home owner in their mortgage payment. This supposedly indicates that homeowners are not making their mortgage payments.

I have a problem with the above.

Number 1, income from the transfer tax of homes sales, should not be included as standard revenue in a school budget. Why should a school budget have a dependency on how many homes are bought or sold in the district?

Number 2, I live in Bethlehem Township and although my house has increased in value and there has not been a re-assessment my real estate taxes have still gone up. They get around the re-assessment by raising the millage rate.

Also, any new homes built in the district, within the past few years, are paying a higher real estate tax since their assessed values are higher.

Number 3, In my eyes, this is the only valid complaint the school district has. If they were expecting real estate tax income from the current home owners and they are not getting it that is definitely a problem.

I purchased my house in 1999. Since then, there was a surge in the past couple of years in purchasing real estate in the Bethlehem area. That does not mean my taxes should go up just because I can sell my home for a higher price. Let's keep the proper perspective on all of this.

More Development - More Traffic?

Bowling Lanes and a new hotel may lead to increased traffic in Lower Nazareth near the routes 248 and 33 interchange. The proposed development includes a 38-lane bowling alley, a 5,400 square-foot restaurant, an 80 seat fast food restaurant, a 120 room hotel and a 700,000 square-foot ware house.

It is projected that this development will add approximately 1,000 cars per day to the area.

Although having access to these additional amenities will be nice, the concern about traffic is a valid one. The Lehigh Valley is experiencing problems at many of the highway interchanges as businesses are added along these major corridors. 

Bethlehem Township is currently experiencing problems with the development going on at the route 33 and Freemansburg Avenue interchange. Poor design when the new shopping center was put in a few years ago has them pondering the traffic problems involved when the rest of the surrounding area is developed. It could potentially lead to a widening of the bridge to accomodate the increased traffic.

Widening a bridge could cost millions of dollars. Who should pay for this? Should it be the developer/builder who will profit from the development or the resident who will benefit from the available services (and the increased traffic/headaches)?