Buying a Home After a Short Sale or Foreclosure

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Southern Nevadans learned that options to buy another home after a short sale or foreclosure abound aplenty during “Purchasing a Home After Foreclosure or Short Sale: Opening the Door to the Facts,” presented last week by Premier Mortgage Lending at Clark County Library.

During the complimentary seminar, Rick Piette of Las Vegas-based Premier Mortgage Lending provided an overview of the current Las Vegas Valley housing market, discussed the considerations of whether to purchase a home, and described current lending programs and eligibility requirements after a short sale or foreclosure.

“I often hear two questions from those who have had a short sale or foreclosure: ‘When can I buy a home again?’ and ‘Is now a good time for me to buy a home?’” Piette explained. “There are just no simple answers. Buying a home is a very personal choice, a family choice, and one that only you can make for yourself. Only by getting current information about the market and all of your options can you make an educated choice.”

Piette explained to the crowd that purchasing a home is both a lifestyle consideration as well as a financial one.

“For some, renting makes sense if they cannot qualify for or afford a mortgage, if they only plan to live here for a short time, or if they don’t feel comfortable being responsible for the upkeep of a home,” Piette said.

“Others, though, prefer living in a home that they own and feel a pride of ownership. They like feeling free to redesign and change up their home to their own tastes and needs without getting pre-approval from a landlord. Homeownership also provides feelings of security and comfort in knowing that the home is yours and you don’t have to worry that your rent will increase, your lease won’t be renewed, or where you’re living will go into foreclosure.”

More concrete is the buying vs. renting financial comparison.

“Financially, you need to figure out the types of mortgage for which can qualify and the costs associated with each kind. Do you have the required down payment? Can you afford the mortgage payments? How do these costs compare with that of renting an identical home?” he said. “For some, whether you buy a home is as simple as dollars and cents.”

New lending programs have emerged that reduce the “wait time” to purchase another home after a short sale or foreclosure. According to Piette, the typical “wait time” in a conventional mortgage is at least two or three years after a short sale and seven years after a foreclosure. Among these is the Back to Work – Extenuating Circumstances program and Another Chance Nevada.

“Last year, the new ‘Back to Work’ FHA-insured program began which can reduce the wait after a short sale to just a year. This program is designed for people whose short sale was the result of an ‘economic event’ like the loss of a job or the reduction of at least 20 percent of your household income, and you have to be able to prove that you’re fully ‘recovered’ from that event,” Piette. Among the requirements is that the borrower has financially “recovered” from that economic event by showing 12 months of timely payments and meets HUD requirements for an FHA-insured mortgage.

“The ‘Back to Work’ program can be a bit confusing and the only way that you can really find out if you qualify is to meet with a full-service lender like Premier Mortgage Lending and go through the qualification process,” Piette said.

“A more straightforward program, with more clear-cut requirements, that cuts the wait to buying a home after a short sale or foreclosure to just a day is Another Chance Nevada. We at Premier Mortgage Lending began this privately funded program a couple of years ago and only offer it to Nevadans.”

Through Another Chance Nevada, private and institutional portfolio lenders offer 15- or 30-year, fixed-rate loans at interest rates typically higher than traditional mortgage rates. At least a 20 percent down payment is required, which can come from personal funds or be obtained as a gift from family members. Borrowers may close within 30 days from the time of loan approval. The loan may be refinanced at any time without penalty.

Hundreds of Southern Nevadans have used an Another Chance Nevada loan on the purchase of a re-sale or a new home. The lender is currently working with Beazer Homes, D.R. Horton, Dunhill Homes, Harmony Homes, KB Home, Pardee Homes, Pulte Homes and Del Webb, Richmond American Homes, Ryland Homes, and William Lyon Homes.

The first step to determining one’s mortgage program is to meet with a full-service lender and go through the mortgage prequalification process.

For additional information or to schedule an appointment for mortgage prequalification, call Premier Mortgage Lending at 485-6600 or visit www.AnotherChanceNevada.com.

Premier Mortgage Lending, NMLS #393282, is located at 8689 W. Sahara Ave., Suite 100, Las Vegas, 89117. The full-service lender is a member of the Las Vegas and Boulder City Chamber of Commerce, Better Business Bureau and Southern Nevada Home Builders Association, as well as an affiliate member of the Greater Las Vegas Association of Realtors.

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