Mortgage in Tennessee
Fuelled in large part by rapid growth in Nashville and Memphis, Tennessee has recently become a hotspot for people wanting to find employment. Large tech companies, like Microsoft , are considering or have opened offices in Nashville. This influx of tech and other high-paying jobs has contributed to some of the country's fastest-growing home prices and a median sales price of just under $350,000 in Nashville . Therefore, if you're thinking of moving to Tennessee, you'll want to use our Tennessee mortgage calculator to ensure that the move still fits within your budget.
Tennessee Mortgage Calculator: Buyers Have Three Main Choices
People looking to buy a home in the Volunteer State should know about three types of mortgages.
- Tennessee conventional mortgage: These mortgages have two subtypes. The first type, called a conforming mortgage, is a loan that is less than the limit imposed by Freddie Mac and Fannie Mae (typically about $550,000). For these loans, you'll need a bare minimum of 3% down and a credit score of 620+. However, if you buy a jumbo loan (one above that limit), you'll likely need 20% down and a credit score above 700.
- Tennessee FHA mortgage: If you're buying a home that fits within the FHA limits, you can put as little as 3.5% down to get an FHA loan. Private mortgage insurance is always necessary. If you have a credit score below 580, but above 500, you can still get an FHA loan with 10% down.
- Tennessee VA mortgage: If you are a military member (present or past), you can get a VA-backed loan. While these loans require a credit score of 660, they also come with many perks, including the ability to put nothing down!
The above programs are available to everyone. However, Tennessee also has assistance for those looking at buying their first home.
First-Time Homebuyers in Tennessee
The Tennessee Housing Development Agency offers three programs to help prospective homebuyers start renting and start owning!
Through the Great Choice program, buyers can obtain a 30-year low-interest fixed-rate mortgage. Buyers who have this mortgage can also apply for down payment assistance.
Eligibility Criteria: Borrowers must have a credit score of 640 or higher. Income and purchase price restrictions apply.
Tennessee also offers down payment assistance in the form of a second mortgage. This loan has a term of 15 years and has the same interest rate as the first loan. Homebuyers will need to make monthly payments.
For homes under $150,000, the amount of assistance is $6,000 flat. For housing at or above $150,000, the assistance amount is $7,500.
Eligibility Criteria: Borrowers must meet all the guidelines for the Great Choice home loan program. Additionally, borrowers must complete a homebuyer education course to receive the down payment assistance.
This program is very similar to the Great Choice one. The primary difference is that it offers an interest rate that is 0.5% lower.
Eligibility Criteria: Borrowers must meet all the criteria of the Great Choice program. Additionally, borrowers must be an active-duty service member or an honorably discharged veteran.
Tennessee Mortgage Calculator: You Have Loan Options!
If you're considering a move to the Volunteer State, explore all your options for a mortgage. There's a good chance that there's a loan type that will work correctly for you! Use our Tennessee mortgage calculator to compare options to find the one that will fit in your budget.
