These are the ones that come up in almost every first conversation we have with a first-time buyer in Las Vegas. Read the ones you care about. Nothing here asks you for anything.
Less than most people think, and more than the down payment alone.
There are three pieces. The down payment starts at 3% on a conventional loan or 3.5% on FHA. The inspection and appraisal run about $400 and $600, and you pay those during escrow rather than on the last day. Then closing costs, which run 2% to 3% of the price.
On a $400,000 home with FHA financing, that is roughly $14,000 for the down payment and the two inspections, plus $8,000 to $12,000 in closing costs.
The closing costs are the piece you can often get someone else to pay.
“Your down payment doesn’t need to be 20%. That’s one of the biggest myths out there. Most first-time buyers put down far less.”
Earnest money is a deposit you put down when your offer gets accepted, to show the seller you mean it. In Las Vegas it usually runs about 1% of the price. It sits in escrow and it goes toward your down payment at the end, so it is not an extra cost.
You get it back if you cancel for a reason your contract protects, which normally covers the inspection, the appraisal and your loan falling through. You can lose it if you walk away for a reason the contract does not cover, or after your protection periods have run out.
Those periods have dates on them. We track them for you.
“Your earnest money deposit also comes into play here. It’s negotiable, often around $3,000 in our market, and it is credited toward your down payment.”
FHA is the program built for buyers whose credit or debt load makes conventional hard. Nevada's down payment programs set their floor at a 640 score.
Lenders also look at your debt-to-income ratio, which is your monthly debt payments divided by your gross monthly income. Conventional usually wants that under about 45%. FHA's published standard is 31% for the house payment by itself and 43% for everything together, and lenders regularly approve above 50% when there is strong credit, savings or extra income behind it.
A lender can pull your score and tell you where you stand in about twenty minutes. It does not cost anything and it does not commit you.
Randy Lovstuen · Canopy Mortgage · 702-812-7406. He is who we send people to for this call.
“Your credit score plays a major role in your mortgage approval because it helps lenders evaluate risk. The better your credit score, the better your interest rate and monthly mortgage insurance cost will be.”
Five things add up to the number. The loan payment, the property taxes, home insurance, the HOA dues if there are any, and mortgage insurance if you put down less than 20%.
People shop on the loan payment and get surprised by the other four. Taxes and dues swing the total by hundreds of dollars between two homes at the same price, which is why every home on our weekly list shows all five lines broken out.
“Your mortgage payment is made of four primary components. Principal, interest, taxes and insurance. This is known as PITI. After that, you may have an HOA fee, and it is not included in your mortgage payment.”
Four programs can, and which one fits you changes month to month.
Funding runs out and the rules get rewritten during the year. A lender who works these programs knows what is funded this week, so start there.
A pre-qualification is a conversation. You tell a lender your income and debts, they pull your credit, and they tell you roughly what you can borrow. It takes about twenty minutes.
A pre-approval goes further. The lender verifies the documents, so the letter carries more weight with a seller.
Get one before you tour anything. It tells you what you are shopping for, and a seller weighing two offers takes the one with a letter attached.
“The numbers in the last chapter are a great starting point, but a pre-approval letter makes them real.”
Conventional with 3% down usually costs less. It asks for less cash up front than FHA's 3.5%, and the monthly payment comes out lower, because FHA adds a one-time fee of 1.75% of the loan and rolls it into what you borrow.
FHA earns its place when your credit score or your debts keep you from qualifying the other way. That is what it is for.
“These are popular with first-time buyers because the down payment is just 3.5%. Some lenders can even work with credit scores below 600, depending on the rest of your financial picture. Thirty-year FHA loans have mortgage insurance for the life of the loan, regardless of how much you put down.”
An extra monthly fee the lender charges when you put down less than 20%.
It protects the lender if you stop paying. It does nothing for you. On a conventional loan it comes off once you owe less than 80% of what the home is worth. On FHA at 3.5% down it stays for as long as you have the loan, which is why people refinance out of FHA later.
On a $400,000 home it runs somewhere around $270 a month. It is a real number and it belongs in your budget.
“PMI is insurance the lender requires if you put less than 20% down on a conventional loan. The good news is it typically goes away once you hit about 20% equity.”
Nobody knows where rates go. What we can tell you is what happens either way.
If you buy now and rates fall, you refinance and your payment drops. If you keep sending the old payment after that, the difference goes straight at what you owe and the loan finishes years early. On a $395,000 home that is about six years and $92,000 in interest you never pay.
If you wait and rates fall, so does everyone else's payment, and more buyers come back into the market at the same time. Prices tend to answer that.
“Based on these inputs, it likely makes more financial sense to buy now rather than wait for rates to drop. The net benefit shown here is just over $26,000.”
A point costs 1% of your loan and buys your interest rate down. On a $380,000 loan a point is $3,800.
It makes sense when you plan to keep the loan long enough to earn the money back. Divide what the point costs by what it saves you each month and you get the number of months to break even. Stay past that and you are ahead.
For a first-time buyer, that money is often worth more in your pocket. Ask the lender to show you both.
“A 2-1 buydown temporarily reduces your interest rate for the first two years of the loan. In the first year, the rate is lowered by two percentage points. In the second year, it’s lowered by one point. In most cases, that cost doesn’t come directly from the buyer. It’s typically paid for using a seller credit.”
Since August 2024, how a buyer's agent gets paid is negotiated and put in writing before you tour a home. The seller may pay it, you may pay it, or the two of you may split it.
The agent who listed a home works for the seller and is paid to get the seller the highest price and the best terms. What you tell that agent about your budget or your timing, they can use for their client. A buyer's agent represents you instead.
We put ours in writing and go over it with you before you sign.
“The listing agent was hired to represent the seller’s best interests. Their job is to help the seller get the best terms possible. While an agent can legally represent both sides of a transaction in Nevada, that doesn’t change who they were hired to work for first.”
We pull the answers to all of these before you write anything.
“Once inside, it helps to separate what’s easy to change from what isn’t. What deserves more attention are signs that point to how the home has been maintained over time. Cosmetic elements are easy to update. Systems take planning.”
Ask us this about every home you like.
Every house has something. The lot backs a main road. The air conditioning is at the end of its life. The dues are high for what they cover. It is priced above what the last three comparable sales closed at.
If someone showing you a home cannot name a single reason to walk away, you are talking to a salesperson. We will give you the list and let you decide whether any of it matters to you.
“HOA approval didn’t override city code. Once we confirmed the city restriction, we stopped the transaction just days after going under contract. It was frustrating in the moment, but it protected the buyer.”
New construction gets you current everything and a warranty, and the builder's sales office works for the builder. Bring your own agent to the first visit, because most builders will not add one later.
Resale usually gets you more house for the money, mature landscaping, and a seller who can be negotiated with. It also gets you a roof and an air conditioner with some years already on them.
We have personally bought both. Neither is the right answer for everybody.
“Builders’ sales agents represent the builder, not you. If you want buyer representation on a new construction purchase, your agent needs to accompany you on your first visit.”
Yes, and we ask on every offer we write.
A seller cannot contribute to your down payment. That money comes from your savings or from a family member as a gift, and gifts are allowed and common.
Closing costs are different. They run 2% to 3% of the price, and a seller can pay them. Whether they agree depends on how long the home has been sitting, how much equity the seller has, and what else is on the table. When they say yes, the cash you bring drops by several thousand dollars.
“A seller can’t help with your down payment, but they can help with your closing costs. In a buyer’s market, when there are more sellers than buyers, it’s common to negotiate up to a 3% seller credit. This can cover almost all your closing costs and even contribute to a rate buydown.”
Price is one lever and it is rarely the only one. A seller also weighs how solid your financing looks, how fast you can close, how long your inspection period runs, and how much earnest money you put up.
A pre-approval letter and a clean timeline win offers that are not the highest number on the table. We have seen it plenty of times.
We will tell you when a home is worth stretching for and when to let it go. There is another one on Thursday.
“In strong seller’s markets, buyers sometimes offer over list price to compete. That can make sense. But if a seller counters by asking the buyer to pay $5,000 or $10,000 over the appraised value, that extra amount must come from the buyer’s cash.”
Your lender sends an appraiser to confirm the home is worth what you agreed to pay. If the appraisal comes in below the price, that difference is the gap, and the lender will only lend against the lower number.
Three ways out. The seller lowers the price to the appraisal. You bring the difference in cash. Or you cancel and keep your earnest money, which is what the appraisal contingency in your contract is for.
We keep that contingency in your offer unless you tell us otherwise and understand what you are giving up.
“If the home doesn’t appraise and the buyer follows the terms of that contingency, they can typically cancel without losing their earnest money. For FHA and VA buyers, those protections are even stronger.”
An inspector spends two or three hours on the home and gives you a long report with photos. Most of it is minor. What matters is the short list: the roof, the air conditioning, the water heater, the electrical panel, and anything that looks like water where water should not be.
Nothing on that report forces you to do anything. You can ask the seller to repair something, ask for a credit instead, or walk away during your inspection period.
Ask for a credit more often than a repair. You control who does the work and how well.
“Most buyers choose to wait to order the appraisal until after the inspection to avoid paying for both if something major is discovered.”
Most deals close. The ones that get bumpy usually get bumpy in the same few places.
None of these are unusual and all of them have a path through. That is most of what we do during escrow.
“Even if a seller responds by stating the home is being sold ‘as-is’ and they will not make repairs, the buyer still retains the right to complete their inspection and decide whether to move forward. If a major issue is discovered, the buyer can still choose to cancel the agreement within the inspection period.”
Nevada caps how much your tax bill can climb each year. A primary residence is capped at 3%. Everything else, including rentals, is capped at up to 8%. The county works out the full tax, compares it to last year's bill, and forgives anything above your cap.
The 3% cap is not automatic.
You have to file a claim form with the Clark County Assessor after you close. People miss it and pay the higher rate for a year. We remind every client, and it is worth putting on your own list too.
“Older homes often have lower property taxes because they’re assessed on older values.”
A Special Improvement District or Local Improvement District is a loan the county or city took out to build the streets, sewers and streetlights in a neighborhood, and the homes there pay it back on the tax bill.
It shows up in newer areas more than older ones. Some sellers have paid theirs off and some have not, and the balance can run into five figures.
It is a real part of what a home costs you every month, and most listings do not mention it. We check it on every home before you write.
“Special Improvement Districts / Local Improvement Districts. Assessments tied to specific properties in Nevada to fund local infrastructure. Can appear as line items in closing costs.”
Dues vary from nothing to a few hundred dollars a month and cover different things in every community. Common ones are front landscaping, a pool, a park, gates and trash.
Two things to watch. Some homes sit in two associations, a sub-association plus a master, and the number on the listing is often only the first one. And an association can levy a special assessment on top of the dues when something big needs replacing.
We pull the governing documents and the real total during escrow, and you get a window to read them and cancel if you do not like what is in there.
“You are to be provided with a copy of the HOA documents, including financial statements, rules, and regulations. You will be given 5 days to review all the documents and if there is something in them that you just cannot live with, you can cancel the purchase agreement without penalty.”
Six months out is normal. So is a year.
Plenty of the people we end up buying homes with started talking to us long before they were ready. Knowing the number you are saving toward beats guessing at it, and there are things worth doing early: find out your credit score, stop opening new accounts, and figure out which down payment program you would use so you know what you are aiming at.
Renting is sometimes the better move for a while, and we will tell you that if we think it. We would rather have the conversation now and be the ones you call later.
“If you’re 6 to 12 months out from buying, meeting with a lender now gives you time to make strategic improvements. Good lenders can guide you on the specific steps to raise your score and save thousands over the life of your loan.”
Text either of us. We answer these all day and there is no version of this where you are bothering us.