Nevada has the fastest growing foreclosure rate in the nation. More than 2,000 homes were in foreclosure in August, that's nearly four times the number of homes in foreclosure in August of last year.
Experts say one in three homes bought in Las Vegas in 2004 and 2005 were paid for with adjustable rate mortgages. Many homeowners are in sticker shock when those mortgages adjust because they are seeing their house payments increase by hundreds of dollars a month.
Loan consultants say to protect yourself from foreclosure, you should be prepared for that change before it happens.
"Need to understand their mortgage and understand when their mortgage is going to change. Some people took what we call a five year fixed period mortgage where it's not going to adjust for four or five years, so they are not in the panic mode like the person a like the person who has a monthly adjustable that changes on a monthly basis," said Scott Rotheiser, Silver State Mortgage.
Mortgage consultants also have some advice for people who have chosen to take out interest only loans or loans for 100 percent of the purchase price of the house. They say you should opt for one of those loans only if you have some extra money in the bank.
If you can only afford the minimum payment on these types of loans and you don't have any savings, they say you could be in trouble down the line.
It is becoming harder to qualify for 100 percent loans because of the high number of foreclosures. Banks are requiring home buyers to have more money in the bank and a higher credit score to qualify for these loans.