Edited and reviewed by CEO Vatche Saatdjian — 30+ years of experience — Expert on FHA loans
From APR to underwriting, understand every mortgage term you'll encounter when buying a home in Las Vegas, Reno, or anywhere in Nevada. Clear definitions, real examples, and Nevada-specific context.
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Master the language of home financing with these Nevada-focused definitions
The process of paying off your mortgage over time through regular monthly payments. Each payment includes both principal (loan amount) and interest. In Nevada, most mortgages are amortized over 15 or 30 years.
The true cost of your loan including interest rate plus fees, expressed as a yearly rate. APR is always higher than the interest rate. Compare APRs when shopping for Nevada mortgages to see the total cost.
A professional valuation of a property's market value conducted by a licensed Nevada appraiser. Lenders require appraisals to ensure the home is worth the purchase price. Costs $500-$700 in Las Vegas/Reno.
Fees paid at closing to complete your mortgage, typically 2-5% of the purchase price. In Nevada, includes title insurance, escrow fees, recording fees, and lender charges. On a $400K home, expect $8,000-$20,000.
A conventional mortgage that meets Fannie Mae/Freddie Mac guidelines with a loan amount at or below $766,550 in Nevada (2025). These loans typically offer the best rates and terms for qualified buyers.
A mortgage not insured by the government (FHA, VA, USDA). Requires higher credit scores (620+) but offers lower insurance costs. Nevada buyers with 20%+ down and good credit often prefer conventional loans.
Your total monthly debt payments divided by your gross monthly income, expressed as a percentage. Most Nevada lenders want DTI below 43% for conventional loans, up to 50% for FHA. Lower DTI = easier approval.
The initial cash payment you make toward the home purchase. FHA loans require 3.5% down, conventional loans 3-20%, VA loans $0. On a $400K Nevada home, that's $14,000 (FHA) to $80,000 (conventional 20%).
A good-faith deposit (typically 1-3% of purchase price) showing you're serious about buying. Held in escrow and applied to closing costs. In Nevada's competitive markets, larger earnest money can strengthen your offer.
A neutral third party that holds funds during the transaction and ensures all conditions are met before releasing money. Also refers to the account where lenders hold funds for property taxes and insurance.
Federal Housing Administration loan requiring only 3.5% down and 580 credit score. Popular with Nevada first-time buyers. Loan limits up to $498,257 in 2025. Includes mortgage insurance for the life of the loan.
A loan where the interest rate never changes during the entire loan term (typically 15 or 30 years). Your monthly principal and interest payment stays the same, providing stability for Nevada homeowners.
A professional examination of the property's condition, checking systems, structure, and potential issues. Costs $400-$600 in Nevada. Not required but highly recommended to uncover problems before closing.
Required insurance protecting your home and belongings from damage. Nevada lenders require proof before closing. Average cost in Las Vegas is $1,200-$2,000/year. Shop multiple insurers to save money.
The percentage charged on your loan balance, determining your monthly payment. Nevada mortgage rates vary by loan type, credit score, and market conditions. Even 0.25% difference saves thousands over 30 years.
A mortgage exceeding conforming loan limits ($766,550+ in Nevada for 2025). Used for luxury homes in Henderson, Summerlin, or Lake Tahoe. Requires excellent credit (700+) and larger down payments (10-20%).
A standardized 3-page form showing your loan terms, projected payments, and closing costs. Nevada lenders must provide this within 3 business days of application. Use it to compare offers from multiple lenders.
The loan amount divided by the home's appraised value. With 20% down, your LTV is 80%. Lower LTV means better rates and no PMI on conventional loans. Nevada lenders use LTV to assess risk.
Required insurance on FHA loans, including 1.75% upfront (typically financed) plus 0.55-0.85% annual premium. On a $400K Nevada FHA loan, that's $7,000 upfront and $183-$283/month for life of loan.
Principal, Interest, Taxes, and Insurance – your total monthly housing payment. Nevada lenders use PITI to calculate DTI. On a $400K home, PITI might be $2,800: $1,800 principal/interest, $500 taxes, $150 insurance, $350 PMI.
Required on conventional loans with less than 20% down, protecting the lender if you default. Costs 0.3-1.5% of loan amount annually. On $400K with 5% down, PMI is $100-$250/month. Can be removed once you reach 20% equity.
Upfront fees (1 point = 1% of loan amount) paid to reduce your interest rate. On a $400K Nevada loan, 1 point costs $4,000 and might lower your rate 0.25%. Makes sense if you'll keep the home 5+ years.
Written commitment from a lender stating how much you can borrow, based on verified income, assets, and credit. Nevada sellers strongly prefer pre-approved buyers. Takes 1-3 days and is essential before house hunting.
The actual loan amount you borrow, excluding interest and other costs. If you buy a $400K Nevada home with $40K down, your principal is $360,000. Each monthly payment reduces your principal balance slightly.
Guarantees your interest rate for a specific period (usually 30-60 days) while your loan closes. Protects Nevada buyers if rates rise. Most lenders lock your rate when you go under contract or upon request.
Replacing your existing mortgage with a new one, typically to get a lower rate, change loan terms, or access home equity. Many Nevada homeowners refinance when rates drop 0.75% or more below their current rate.
Protects against ownership disputes or liens on the property. Nevada requires two policies: lender's (you pay) and owner's (optional but recommended). Costs about $1,000-$2,000 on a $400K home, one-time fee.
The lender's detailed evaluation of your financial profile and the property to determine loan approval. Nevada underwriters verify income, review credit, check assets, and ensure the home meets guidelines. Takes 1-3 weeks.
Zero-down mortgage for eligible military veterans, active-duty service members, and spouses. No PMI and competitive rates. Popular in Nevada's large military community. Requires VA Certificate of Eligibility and funding fee.
Tax form showing your annual wages and withheld taxes from an employer. Nevada lenders require past 2 years' W-2s to verify employment income. Self-employed borrowers provide tax returns instead.
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Common questions Nevada homebuyers ask about mortgage terminology
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