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Nevada Mortgage Education
Understand the real cost of your Nevada mortgage. Learn why APR matters more than interest rate when comparing conventional loan offers – and how to avoid overpaying.
The interest rate is the cost you pay each year to borrow money, expressed as a percentage. This is what you see advertised and what determines your monthly principal and interest payment.
Example:
$400,000 loan at 7.0% interest rate = $2,661/month payment
The APR includes the interest rate PLUS most of your closing costs and fees (origination, discount points, mortgage insurance premiums, etc.) expressed as one annual rate.
Example:
Same loan at 7.25% APR shows true cost including $5,000 in fees
Always compare APR when shopping for mortgages – not just the interest rate. A lender advertising a low interest rate might have high fees that make the APR (true cost) much higher than a competitor.
You're buying a $450,000 home in Las Vegas with 20% down ($360,000 loan). Here are two actual offers you might receive:
| Lender A | Lender B | Winner | |
|---|---|---|---|
| Interest Rate | 6.75% | 7.00% | Lender A |
| Monthly Payment | $2,334 | $2,395 | Lender A |
| Lender Fees | $7,200 | $2,500 | Lender B |
| APR (True Cost) | 7.05% | 7.12% | Lender A |
At first glance, Lender A looks better (lower rate, lower payment). But Lender A is charging $4,700 more in fees!
When you compare APR, you see Lender A is actually slightly better overall (7.05% vs 7.12%), but it's much closer than the interest rate suggested. If you're planning to stay in the home less than 5 years, Lender B's lower upfront fees might actually save you money.
Always ask: "What's your APR?" to compare apples-to-apples.
APR assumes you'll keep the loan for 30 years. If you're planning to sell your Las Vegas home in 3-5 years, paying higher fees for a slightly lower rate (which shows a better APR) might not make sense. You won't recoup the upfront costs through monthly savings.
APR on an ARM is based on assumptions about future rate changes, which may not reflect reality. The APR might be artificially low or high depending on those assumptions.
Comparing APR between an FHA loan (which includes mortgage insurance premium) and a conventional loan can be confusing because the costs are structured differently. Always compare the same loan type APR-to-APR.
Get official Loan Estimates (not just quotes) from at least 3 Nevada lenders for the same loan amount, down payment, and lock period.
Look at the APR on page 3 of the Loan Estimate. The lender with the lowest APR generally has the best combination of rate and fees.
Make sure the monthly payment fits your budget. Even if APR is low, you still need to afford the monthly principal and interest payment.
If you're staying in the home long-term (10+ years), lower APR wins. If selling within 5 years, focus more on lower fees and monthly payment.
If one lender's APR is much different, ask why. Sometimes there are hidden fees or credits that explain the difference.
Our Nevada loan officers provide transparent APR comparisons with no hidden fees. See exactly what you'll pay – rate, fees, and true cost – before you commit.
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Valley West Mortgage - NMLS #65506
Nevada Mortgage Lender License
Licensed to conduct business in Nevada
NMLS Consumer Access: www.nmlsconsumeraccess.org
We are an Equal Housing Lender. We do business in accordance with the Federal Fair Housing Law and Equal Credit Opportunity Act. This company does not discriminate on the basis of race, color, religion, national origin, sex, marital status, age, or handicap.
This is not a commitment to lend. All loans subject to credit approval. Rates, terms, and conditions are subject to change without notice. Not all applicants will qualify. Additional restrictions may apply. Property insurance required. Flood insurance may be required. This website is for informational purposes only and does not constitute financial advice. Consult with a licensed loan officer for personalized guidance.