Nevada closing costs explained

In Nevada, both buyer and seller pay closing costs, but they pay different fees. Buyers typically pay 2-5% of the purchase price in closing costs (lender fees, appraisal, title insurance, prepaid taxes/insurance, etc.). Sellers typically pay 6-10% (primarily real estate agent commissions plus some title/escrow fees).

However, buyers can negotiate for the seller to pay some or all of buyer's closing costs through "seller concessions" (also called seller credits). This is common in Nevada, especially with FHA and VA loans where sellers can contribute up to 6% and 4% respectively toward buyer's costs.

Closing costs are typically paid upfront at closing (separate from your mortgage), not financed into the loan amount. You'll need cash to cover these costs plus your down payment. However, there are exceptions:

1. No-Closing-Cost Mortgages: Lender covers closing costs in exchange for a higher interest rate (not technically "financed," but you avoid paying upfront).

2. Seller Concessions: If seller agrees to pay your closing costs, you won't pay them out-of-pocket.

3. VA Loans: VA loans allow you to finance the VA funding fee into the loan, reducing upfront cash needed (though not technically a "closing cost," it's a significant upfront fee).

No—your FHA 3.5% down payment must go toward the down payment only; it cannot be used for closing costs. You'll need separate funds to cover closing costs (typically 2-4% of the purchase price in addition to your 3.5% down).

Example: On a $300,000 Nevada home with FHA, you need $10,500 down (3.5%) PLUS approximately $6,000-$12,000 for closing costs = total of $16,500-$22,500 cash to close.

However, FHA allows gift funds for closing costs (family members can gift you money to cover them), and sellers can contribute up to 6% toward your closing costs. Many Nevada FHA buyers use seller concessions or gift funds to minimize out-of-pocket cash needed.

"Closing costs" refer to the fees and expenses for finalizing your mortgage (origination, title, appraisal, escrow, taxes, insurance, etc.). These typically total 2-5% of the purchase price.

"Cash to close" is the total amount you need to bring to closing. It includes closing costs PLUS your down payment, MINUS any earnest money deposit you already paid, and minus any seller concessions.

Example: $400,000 Nevada home. 3.5% FHA down = $14,000. Closing costs = $10,000. Earnest money deposit = $5,000. Seller concessions = $5,000. Cash to close = $14,000 + $10,000 - $5,000 - $5,000 = $14,000. Your Loan Estimate and Closing Disclosure will show the exact cash to close figure.

Yes—if your actual closing costs come in lower than the amount you brought to closing, the escrow company will refund the difference, usually via check within a few days after closing.

Your Loan Estimate (LE) provided early in the process is an estimate. Your Closing Disclosure (CD), which you receive at least 3 days before closing, shows final numbers. If the CD overestimates and actual costs are lower, you'll be refunded. However, if costs are higher than the LE, lenders can only increase certain fees within limits (CFPB rules protect borrowers from surprise fee increases). Work with your Nevada lender to ensure accurate estimates.

Some closing costs are tax deductible, but many are not. As of current tax law (consult a CPA for your specific situation):

Deductible at Closing: Prepaid mortgage interest, prepaid property taxes, and discount points (if certain conditions are met) are generally deductible in the year you buy the home.

Not Deductible: Origination fees, appraisal, title insurance, escrow fees, home inspection, recording fees, etc., are not deductible. However, these costs may be added to your home's cost basis, which could reduce capital gains tax when you sell.

Nevada-Specific: Nevada has no state income tax, so there's no state-level deduction. Only federal tax deductions apply. Keep all closing documents for tax purposes and consult a tax professional.