Factors in Your Nevada Mortgage Payment
Your monthly mortgage bill includes your principal and interest payments, and can include payments to your escrow account. An escrow account holds your money for property taxes and homeowners insurance, two costs that stay with you as long as you own a home.
If you’re planning on buying in Nevada, you’ll be happy to hear that property taxes in Nevada are relatively low. The average effective property tax rate is 0.48%. To determine the market value as well as the replacement cost of any structures on your property, a county assessor will appraise your home every five years. The assessed value is 35% of the taxable value, which means tax rates apply to just a small portion of your home value. Taxes go to school districts, county costs such as infrastructure maintenance and improvements, as well as other community needs.
Nevada has cheap property taxes, but residents here can expect to pay $1,483 for homeowners insurance annually, according to Insurance.com data. Nevada has less risk as it’s not situated on a coastline or hurricane path. However, the state is prone to wildfires. According to the Insurance Information Institute, Nevada ranks 12th among state that have the highest risk of extreme wildfires. While you might not think you’re at risk of flooding, it’s something to keep in mind if you’re in an area that experiences flash floods. Homeowners insurance doesn’t cover flood damage, so if you want coverage you’ll have to get a policy through the National Flood Insurance Plan.
A financial advisor can help you understand how homeownership fits into your overall financial goals. Financial advisors can also help with investing and financial planning - including retirement, taxes, insurance and more - to make sure you are preparing for the future.
Costs to Expect When Buying a Home in Nevada
One of the first times you’ll open your wallet during the home-buying process is when you pay your home inspector. When you make an offer on a house, you usually have a time period to complete any home inspections you’d like before continuing with the contract. It’s your chance to get an inside look at the condition of the home.
Most Nevada home inspections cost between $242 and $334. The pricing is generally based on square footage and number of outbuildings. A regular home inspection covers most structural and easily observable components, such as roofs, basements, plumbing and electrical, but doesn’t include specialty tests. If you’d like a mold, radon or water quality test, you can generally add those inspections on for an additional cost.
After the home inspection, you’ll usually move forward with the offer and your mortgage lender. Prepare to open your wallet again. This time, you’ll be paying a number of fees to various entities. These charges are collectively known as closing costs. Nevada closing costs are on average 1.63% of a home's value.
Average Closing Costs by County
| County | Avg. Closing Costs | Median Home Value | Closing Costs as % of Home Value |
|---|
| Carson City | $5,565 | $273,800 | 2.03% |
| Churchill | $4,749 | $191,500 | 2.48% |
| Clark | $5,802 | $262,700 | 2.21% |
| Douglas | $6,629 | $378,800 | 1.75% |
| Elko | $4,983 | $212,500 | 2.34% |
| Esmeralda | $2,839 | $65,000 | 4.37% |
| Eureka | $4,000 | $120,100 | 3.33% |
| Humboldt | $4,600 | $180,600 | 2.55% |
| Lander | $4,593 | $179,900 | 2.55% |
| Lincoln | $4,210 | $140,900 | 2.99% |
| Lyon | $5,006 | $214,900 | 2.33% |
| Mineral | $3,465 | $98,900 | 3.50% |
| Nye | $4,430 | $163,300 | 2.71% |
| Pershing | $3,921 | $113,000 | 3.47% |
| Storey | $5,252 | $240,700 | 2.18% |
| Washoe | $6,280 | $334,100 | 1.88% |
| White Pine | $4,340 | $154,100 | 2.82% |
Our Closing Costs study assumed a 30-year fixed-rate mortgage with a 20% down payment on each county’s median home value. We considered all applicable closing costs, including the mortgage tax, transfer tax and both fixed and variable fees. Once we calculated the typical closing costs in each county we divided that figure by the county’s median home value to find the closing costs as a percentage of home value figure. Sources include the U.S. Census Bureau, Bankrate and government websites.
Breaking down what you’ll pay for closing costs starts with what you owe your mortgage lender. Generally known as origination fees, these costs can include services such as document preparation, tax service, loan processing, underwriting, commitment fees and more. This is one of the flexible areas for costs. You’ll find that some lenders charge for certain mortgage services while others don’t, which can be an incentive to shop around before deciding on a lender. After all, it’s your money.
The next batch of charges are considered third-party fees and include paying for an attorney’s services, appraisals, flood certification, surveys and credit reports. This is completely dependent on your particular home-buying process. Some buyers don’t use an attorney, while others opt to consult several: it all depends on your particular transaction.
Another cost you’ll come across is title insurance. Your lender usually requires this type of insurance that protects its interest in the loan in the case of a title defect and is known as a loan policy. However, that’s not all: You can purchase a separate owner’s policy to protect the full value of the home. This is a one-time charge that can help pay for legal fees in the event that an undisclosed or unknown title defect becomes known while you own the home. For more detailed information, refer to the Consumer’s Guide to Title Insurance issued by the Nevada Division of Insurance.
Nevada charges a state transfer tax, and its counties charge an additional tax called the real property transfer tax. According to Nevada law, the buyer and seller are jointly responsible for the payment of the tax, so it will probably be worked out during negotiations who will pay what. The combined charge is $1.95 for each $500 of value if the value is more than 100. Homes in Clark County have an additional $0.60 added, while Washoe and Churchill counties add $0.10 each.
Details of Nevada Housing Market
Nevada, known not only for Las Vegas, but also for its gold and silver mines, ranks 32nd for population with 3.1 million residents, according to estimates by the Census Bureau.
Despite its size, Nevada still has a number of urban areas. Nevada’s largest cities include Las Vegas, Henderson (a suburb of Las Vegas), Reno, the unincorporated town of Paradise, which is another Las Vegas suburb and the city of North Las Vegas. Carson City, 431 miles northwest of Las Vegas, is the state capital, yet it only has 58,993 residents. Close to 80% of Nevada’s population resides in the 10 most populous cities, with very few residents living outside of urban areas.
The Silver State has the largest amount of land owned by the Bureau of Land Management. In fact, more than half of Nevada’s land is owned by the federal government. Much of the state is an arid desert, which also contributes to why land ownership has stayed heavily with the government, rather than been passed down to farmers, which is the usual progression.
In regards to Nevada’s housing market, the state had the highest foreclosure rate from 2007 to 2012, according to RealtyTrac data. The state was hit hard by the recession and the foreclosure numbers prove how devastated the damage the housing market suffered. In the last few years, foreclosure rates were still high, but Nevada lost its top billing to New Jersey, another state that suffered badly post-recession.
In SmartAsset’s most recent Healthiest Housing Markets study, Nevada did not crack the top 10. While it ranked near the bottom for stability factors, it made up with days on market and affordability – two of the four factors we looked at for the study.
The state’s median home value is $373,000.
Local Economic Factors in Nevada
Nevada has several companies on the 2020 Fortune 500 list. Most of these are in the tourism industry, highlighting Nevada’s dependence on tourism. The top employers in the state, according to the State of Nevada Department of Employment, Training and Rehabilitation, are the Nevada government (including school districts), Wynn Resorts, Bellagio, MGM and Aria Resort. Along with tourism, Nevada’s top industries include mining, aerospace and defense.
The per capita personal income (PCPI) which helps indicate the economic quality of life, was $60,213 for Nevadans in 2021. That places Nevada behind the national average of $65,148, according to the Bureau of Economic Analysis. Data from the Bureau of Labor Statistics shows that unemployment in Nevada was 5.2% in December 2022, above the national average of 3.5%.
Nevada is one of only eight states that have no income tax. That means you’ll only pay federal income taxes on your earnings. You won’t escape sales tax, however. Nevada’s state sales tax is one of the highest in the U.S. at 6.85%, with an additional percentage added for local sales tax rates. The good news is that Nevada doesn’t have an estate or inheritance tax, which are taxes you’ll find common in the Northeast and other states.
Ready to move to the Silver State? Get prepared ahead of time by comparing your cost of living. For instance, moving from San Diego, California to Las Vegas, Nevada would result in a 13% decrease in cost of living, on average, for a single tax filer making $55,000 a year. A move from Denver, Colorado to Reno, Nevada equals a 5% lower average cost of living due to cheaper taxes, housing and food. And if you moved from Seattle, Washington to Carson City, Nevada, you could see an 8% average decrease in cost of living due to lower housing and food costs.
Mortgage Legal Issues in Nevada
Nevada has certain protections in place for homebuyers, including the most common: mandatory sellers’ disclosures. Like a large number of states, Nevada requires homeowners to disclose certain property conditions and factors (such as material defects) so that the buyer is aware prior to closing on a home loan or occupying the property. The Nevada Real Estate Division publishes the five-page Nevada seller’s disclosure form, which you can read over to see what it covers.
Turning to foreclosure, you might already know that Nevada was one of the top states for foreclosure rates during the recession. Fortunately, the state has started to recover and it’s not a prevalent as it was at the height of the financial crisis.
If you’re curious how the process works, in Nevada lenders can foreclose either judicially (through the court system) or non-judicially. While both option exist, non-judicial foreclosures are far more common. This means that your mortgage documents included a deed of trust and a power of sale clause. Power of sale allows your lender to appoint a trustee to sell your home at a foreclosure sale. It’s usually a quicker process than a judicial foreclosure. The minimum number days to foreclose in Nevada is 111 days from the date of the Notice of Default. You’ll receive a Notice of Default from your lender when you miss your monthly mortgage payments.
There are chances for mediation during the foreclosure process, so if you’ve received a notice, it’s important to contact foreclosure counselors and/or legal support. If no mediation or loan repayment plan is agreed upon, your home will be sold at a Trustee’s sale. Nevada allows deficiency judgements, which is when a lender files a lawsuit to recover the difference between the foreclosure sale price and the total debt.
Nevada Mortgage Resources
Available Resources
| Resource | Problem or Issue | Who Qualifies |
|---|
| Nevada Hardest Hit Fund | Offers funding to reduce principal and second mortgage payments, plus mortgage assistance. | At-risk homeowners who are facing foreclosure. |
| Nevada Homeowner Relief Program | Helps to pair first-time homebuyers and potential homeowners with the programs that will suit them the best. | Available for homeowners seeking loan modification, borrowers who are current but underwater, those who have lost their homes to foreclosure and households working toward homeownership. |
| USDA Rural Development - Single family loans | Offers payment assistance to increase an applicant’s repayment ability. | Applicants must be without decent, safe and sanitary housing; Be unable to obtain a loan from other resources on terms and conditions that can reasonably be expected to meet; Agree to occupy the property as your primary residence; Have the legal capacity to incur a loan obligation; Meet citizenship or eligible noncitizen requirements; Not be suspended or debarred from participation in federal programs. |
Nevada was one of the states that was hardest hit by the recession. Therefore, the state has set up a number of resources to help, such as Home Again and the Nevada Hardest Hit Fund. If you’re on the other end of the scale and need help as a first-time homebuyer, you can find that as well. Home Again Nevada has resources for down payment assistance.
Another avenue to explore is a home loan through the USDA. If the home you’re interested in is located in an eligible area and you meet income qualifications, you can apply for this government-backed mortgage.
Maybe you’re thinking of buying a retirement home in this southwestern state. Take a look at Nevada’s retirement tax-friendliness to see if it’s the right state for your golden years. Or, if you’re transferring jobs, you can use the Nevada paycheck calculator to get an idea of how your finances will look.
