Real Estate Financing and Mortgages
Security instruments
Nevada practice relies on the deed of trust, a three-party instrument naming the trustor (borrower), beneficiary (lender), and trustee, who holds the power of sale. Default leads to nonjudicial foreclosure: notice of default, a statutory waiting period, notice of sale, and a trustee's sale. A mortgage is a two-party lien; because judicial foreclosure is slower, it is less common in Nevada. Know the difference between the note (the promise to pay) and the security instrument (the lien), and that the loan follows the note when sold.
Loan types and costs
Conventional, FHA (low down payment, mortgage insurance), and VA (eligible veterans, funding fee, no monthly mortgage insurance) each have distinct underwriting rules. Private mortgage insurance is generally required above 80% loan-to-value and must terminate automatically at 78% of original value based on the amortization schedule. Points are prepaid interest: one point equals 1% of the loan amount. Discount points buy a lower rate; origination points pay the lender's fee.
Regulation and disclosures
Mortgage brokers, bankers, and loan originators are licensed through Nevada's mortgage lending regulator and the national registry. Federally, the Loan Estimate must be delivered within three business days of application and the Closing Disclosure at least three business days before consummation. RESPA prohibits kickbacks and unearned fee splits for settlement services.
Worked example: Price $400,000, loan $340,000. LTV = 340,000 ÷ 400,000 = 85%, so mortgage insurance applies. Two discount points = 2% × $340,000 = $6,800 paid at closing.