Current Mortgage Rates in Nevada

You need to be savvy when you’re looking for a mortgage in Nevada. Mortgage rates change daily — so why not get the most up-to-the-minute, useful information available? Mortgage lenders are licensed by the states they serve, so let Benzinga help you find the best mortgage rates in Nevada.

Best Mortgage Lenders in Nevada for Rates

What is a Mortgage Rate?

A mortgage rate is the interest a lender charges to let you borrow from that particular lender. The combination of the interest rate and type of mortgage determines how much you pay for the loan. 

• A fixed-rate mortgage loan’s interest rate never changes and your principal and interest payments remain the same during the term of your mortgage. The mortgage term is also known as the loan period. 
• An adjustable-rate mortgage loan’s interest rate changes at specific times. Adjustable-rate loan costs can increase or decrease. The best mortgage companies offer several mortgage types with different interest rates.

What Factors Impact Your Mortgage Rate?

There are ways you can personally influence your mortgage rate — and there are other factors you have no control over. Here’s what you can expect:

• The federal funds rate is the interest rate that determines the prime rate that lenders offer to low-risk borrowers. It’s set by the Federal Reserve Board and is based on government monetary policy and economic conditions. You have no control over the federal funds rate but the prime rate is about 3% above the federal funds rate. How much you pay above the prime rate involves factors that you can control.

• Your credit score summarizes the amount of risk you present to lenders. In other words, the higher your score, the better the mortgage rate you’ll receive. Credit scores range from 300 to 850. A score of 620 usually qualifies for a mortgage but may not get you the best interest rate. A score above 670 may offer a good interest rate, but 740 is better. You’ll qualify for the best rate if your credit score is above 800.
• Your debt-to-income ratio (DTI) states how much monthly income you have compared to the amount of debt that you owe. Your debt-to-income ratio must be below 43. Add together your monthly debt payments (car and college loans, child support, etc.), then divide by your gross income (before taxes and deductions) to get your DTI.
• Your loan type impacts your mortgage rate. The best mortgage companies offer these common loan types: 30-year fixed, 15-year fixed and adjustable-rate mortgages. Loan types determine how long the lender commits money at a specific interest rate. Generally, the shorter the time commitment, the lower the interest rate.
• Location affects mortgage rates. Mortgage rates are typically stated as a national average when you Google “today’s mortgage rates.” However, mortgages are competitive at the state level. You’ll find that lower interest rates may be offered to attract more buyers when fewer people are looking for a home mortgage in Nevada. Rates go up when the demand for mortgages is high.
• Government-backed loans typically offer lower mortgage rates. Federal Housing Authority (FHA), Veterans Administration (VA) and United States Department of Agriculture (USDA) loans are common. The government guarantees these loans if the borrower stops making payments. Less lender risk means lower interest rates. Many lenders offer these loans and many buyers qualify for them. Lenders for first time buyers offer these loans.

What is a Mortgage Type?

There are many mortgage types, but the most important factors are how a mortgage type affects the interest rate and the length of the mortgage. Another important difference is whether the mortgage is private sector (conventional loan) or a government-backed mortgage (FHA, USDA or VA). You should consider these mortgage types when you request a mortgage purchase quote.

Conventional Loans

Private mortgages are separate from government-backed mortgages. Borrowers have to meet underwriting guidelines established by individual lenders, which are almost always stricter than government-backed loans. Conventional mortgages offer advantages to people with large down payments, high credit scores and low DTIs. Interest rates are higher for conventional loans.

FHA Loans

Federal Housing Authority (FHA) loans are backed by the federal government — they’re also called government-insured or government-guaranteed loans. You do not directly apply to the FHA, nor does the FHA directly loan the money to you. The FHA compensates the lender if you go into foreclosure but the mortgage is owned and managed by the original lender.

You (the borrower) must meet both the lender and FHA guidelines, which creates a 2-tier qualification process. Let’s say you don’t qualify for an FHA loan from one lender. You can apply with another lender with different guidelines.

Lenders for first time buyers recommend FHA loans because credit scores can be as low as 580 and down payments as low as 3.5%.

USDA Loans

United States Department of Agriculture loans are also backed by the federal government. You apply for USDA loans with a private lender. Check the USDA map to see where the home you want to buy fits on the map.

VA Loans

Veterans Administration loans are easy to qualify for as long as you’re a qualified active or veteran military member or spouse. These loans usually don’t require a down payment. Loans are either direct or backed by the VA. Direct loans are different than VA-backed loans because you apply directly to the VA without involving another lender. 

What is a Mortgage Term?

A mortgage term refers to the time it takes to repay the loan in full. You’ll find mortgage terms for just about any length of time, including 5, 10 and 20 years. The loan term creates an amortization schedule that itemizes each loan payment. Common mortgage terms are 15- and 30-year fixed and 5/1 ARMs. 

30-Year Fixed

There are 360 payments in a 30-year mortgage. The interest rate is fixed so your basic monthly payment doesn’t change. This applies to your principal (the full amount you borrow) and interest. However, your monthly payment might vary based on changes in property taxes, insurance or homeowners association fees. 

You’ll pay mostly interest early on in your mortgage and mostly principal during later payments. A $100,000 mortgage at 3.7% interest means you’ll pay $460.28 for principal and interest. Of that, $151.95 goes towards principal and $308.33 goes toward interest. Your last payment is also $460.28, but you’ll pay $458.87 toward principal and only $1.41 for interest. Shorter-term loans usually have lower interest rates.

15-Year Fixed

A 15-year fixed-rate works the same as a 30-year fixed, except you’ll only make 180 payments. Fewer payments mean higher monthly payments but a lower interest rate — your total cost is less. A $100,000 mortgage at 3.2% has a $700.24 monthly payment.

5/1 Adjustable-Rate Mortgage (ARM)

Adjustable-rate mortgages are significantly different from fixed-rate mortgages because the interest rate changes at specific times during the loan. The “5” in a 5/1 ARM is the number of years that the interest rate remains fixed. The “1” indicates that the interest rate changes once per year after the 5-year fixed period. Payments are usually scheduled over 30 years.

Currently, a 5/1 ARM averages more in Nevada than fixed-rate loans. This means they are generally less attractive at this time. A 5/1 ARM for $100,000 mortgage at 3.87% will have a monthly principal and interest payment of $469.95 for the first 5 years. If the interest rate increases to 5.87% (2% increase) at the first adjustment, the monthly principal and interest payment increases to $574.37. 

Typically, there is a lifetime interest rate cap. If the cap is a 5% increase, in future years the principal and interest rate could become a monthly principal and interest payment of $731.36 at 8.87% (5% total increase). Some people research a refinance quote for a fixed rate during the first 5 years if they think interest rates will be higher when their rate adjusts.

Current Mortgage Rates in Nevada

These frequently updated tables are Nevada-specific. Updates come from changes in the federal funds rate, individual lender policies and Nevada economic conditions. The Federal Open Market Committee sets a target federal funds rate 8 times a year. Lender policies change at any time but historically not often. 

Calculating Interest in Nevada

Interest is a small percentage that the lender earns based on the amount that you borrow. The more you borrow, the more interest you’ll pay (although the interest rate remains unchanged). The total interest shown in this chart is the interest you’ll pay over 30 years.

Lender Credit Score Minimums in Nevada

Begin your search with lenders that offer FHA loans if you have a low credit score. You can qualify for a mortgage with a 580 credit score and with as little as 3.5% down. Most lenders won’t accept a score below 620. You might want to raise your score if you want to qualify for a particular loan. Raising your score might mean you pay off debt, pay your bills on time, keep balances low on credit cards and only open new credit accounts as needed. 

Look for the right mortgage in Nevada — use reliable information as you select your mortgage lender and know that mortgages are available for every lifestyle and financial situation. Benzinga’s data and your research can team up to help you find the best mortgage for you.