Don’t fret about buying a house in Tennessee! According to Redfin, 88,402 homes for sale in Tennessee were sold in 2024 alone. That’s roughly 10 homes for sale in Tennessee every hour. Thousands of people figure out buying a house in Tennessee and find their dream homes in just a few months. However, rushing before you figure out the process of how to buy a house in Tennessee can lead to problems.
Buying a house in Tennessee has a few essential steps. Take a few minutes to read our guide on how to buy a house in Tennessee, and you can get on your way to purchasing your home in no time. Here’s what to know today.
Look At Your Finances
Before you start buying a house in Tennessee, you need to take an in-depth look at your finances. Sit down with a financial advisor and understand how you can cover a down payment, closing costs, and other expenses in the home buying process. Take a look at your savings and see how much you can put toward a down payment. Ask your advisor, “How much does it cost to buy a house in Tennessee?”
Your credit score is a major factor in finding a mortgage. Most mortgage companies in Tennessee do not offer loans for anyone with a credit score lower than 620. You can raise your score by paying off any outstanding loans and creating a plan to regularly pay off your credit card expenses. You can get a credit check from an organization like Experian.
If you can’t cover the entire cost of a home, you can start looking at mortgages. You may want to start shopping for mortgages before you start shopping for homes for sale in Tennessee. This can help you determine how much you can borrow and what your maximum price for a home is. This can also help you see how the median sale price and Tennessee mortgage rates are faring.
Many mortgage companies follow the 28-and-36 rule. This means that your housing expenses, including monthly mortgage payments, home insurance, and real estate taxes, should total no more than 28% of your gross income. Your monthly payments on all your outstanding debts, including credit card debts and student loans, should total no more than 36% of your gross income.
If you’re going to spend more than 28% on buying a house in Tennessee, you will likely not get a mortgage and you probably should not start buying a house in Tennessee. If taking out a mortgage or buying a home means you spend over 36% of your income on various expenses, you shouldn’t buy a home, either.
Find Payment Assistance
You have several options for payment assistance in Tennessee, including unique and statewide first-home buyer programs. Here are just a few options you can pursue to buy house in Tennessee. Remember to talk to a financial advisor before pursuing any assistance for buying a house in Tennessee.
Mortgages
According to US News, the top Tennessee mortgage companies include Rocket Mortgage, Bison State Bank, and NBKC Bank. These organizations offer several different mortgages, including conventional mortgages, FHA loans, VA loans, and USDA loans.
Conventional mortgages are loans that government organizations do not back. You can get a conventional mortgage from a private lender or bank. In general, conventional mortgages have higher requirements, sometimes requiring you to have a credit score of over 680. However, conventional mortgages can have lower interest rates and fees than government-backed loans. If you have a great credit score and a plan to make monthly mortgage payments, you should consider a conventional Tennessee mortgage.
FHA loans are from the Federal Housing Administration. You can get an FHA loan if you have a credit score as low as 500, but your loan can have a high interest rate. Make sure you have a good plan to pay your loan off.
VA loans are from the Department of Veterans Affairs and are for active-duty service members, veterans, and the surviving spouses of veterans. VA loans come with no down payment requirements, no penalty fees, and low interest rates. You can use a VA loan for buying a house in Tennessee of any type, including a condo, a duplex, or a mobile home. You must have a Certificate of Eligibility (COE) to apply for and receive a VA loan.
USDA loans are from the Department of Agriculture. In Tennessee, a USDA loan can help you purchase a home in a rural or suburban area but not in a city like Nashville. USDA loans generally do not require a down payment and are available for low-income people. You should talk to a USDA loan provider to see if you qualify.
First Time Home Buyer Tennessee Programs
The Tennessee Housing Development Agency (THDA) provides Great Choice Home Loans for first time homebuyers in Tennessee. Great Choice Home Loans are on a 30-year term, have fixed interest rates, and can cover up to 96.5% of your total home price. You can use a THDA loan to purchase a home of up to $400,000, and you must be a low or moderate-income resident in Tennessee.
If you’re a first time home buyer TN who qualifies for a Great Choice Home Loan, you can get a Great Choice Plus loan. These first home buyer grants Tennessee can provide up to $15,000 in closing costs or down payment assistance. You can get a loan for a home for sale anywhere in Chattanooga.
THDA Homeownership for Heroes is a first time home buyer Tennessee program for active-duty service members, veterans, and first responders in Tennessee. The program offers first home buyer grants TN on 30-year terms with reduced fixed interest rates, and you can borrow up to 100% of your home’s purchase price.
The Housing Fund is a non-profit organization that provides first time homebuyers with loans and down payment assistance. You can also get a home improvement loan of up to $35,000 for structural repairs, accessibility needs, and other improvements. You can receive loans for a home anywhere in Tennessee, including in the largest cities in Tennessee and towns near Chattanooga, but your income must be at or below 120% of your area’s median income.
A few municipal governments also offer first time home buyer TN programs. The City of Knoxville Downpayment Assistance Program provides funds for homes built by Home Source East Tennessee, Neighborhood Housing, and East Tennessee Housing Development Corporation. The Knoxville Homemakers Program also offers vacant lots and substandard homes for sale for first-time homebuyers, though you will need to build a new home or renovate the existing property significantly. Shelby County’s Down Payment Assistance Program helps low-income residents in Shelby County start buying a house in Tennessee for less than $400,000.
Get Pre-approval for a Mortgage or First Time Homebuyer Program
Once you’ve found the right mortgage or program for buying a home in Tennessee, you should look to get pre-approval. Pre-approval of a mortgage can make it easier to find a good home and smooth the process of actually getting your mortgage. Talk to a few different mortgage lenders and find a mortgage that’s right for you buying a house in Tennessee.
Pre-approval is different than pre-qualification. Pre-qualification means that the lender will give you an estimate of how much you can borrow, which is important, but it doesn’t mean that you will get a loan. Being pre-approved means the lender will examine your finances and determine if you can pay a loan off, encouraging them to give you a loan. Talk to your lender about how to buy a home in Tennessee once you’ve been pre-approved.
Find the Right Real Estate Agent
The ideal Tennessee real estate agent will have several qualities:
- Years of experience in buying a house in Tennessee in the area you’re planning to move into, including living in the area you want to live in
- Knowledge of how to buy a house in Tennessee
- Experience buying and selling the exact type of home you want to buy
- Affordable rates reflective of their experience and expertise
- An ability to find homes around the median listing price in your area
- Interest in you and your needs
- Confidence in finding the right home and buying a house in Tennessee
- A willingness to negotiate with a potential seller on buying a house in Tennessee
Spend some time looking at a few agents and getting suggestions from your friends and family for good ones. You can visit websites like Realtor.com to find reviews of Tennessee real estate agents. Schedule appointments with a few and ask them questions on how to buy a house in Tennessee.
Think About What You Need in a Home
You can start house hunting once you’ve found the right agent. The first step to actually buying a house in Tennessee is to think about the necessary qualities in your home. There are a few things you should think about as you figure out how to buy a house in Tennessee and find the best place to buy a house in Tennessee.
Children
If you plan on having children or having more children, you may want to buy a home in Tennessee with an extra bedroom. You can also try buying a house in Tennessee that has an area for a nursery or a playroom. Try to look for a property with a big backyard where you can put a play structure or have room for your children to play games.
Having children also means you should think about school systems. Do some research on cities and towns with top schools, then try buying a house in Tennessee that is in an area close to an elementary school. You may also want to look at homes close to pediatricians, children’s hospitals, and kid-friendly attractions.
Older Relatives
If you plan on taking care of older relatives in the future, you may also want to get a home with an extra bedroom. Try to look for a bedroom on the ground floor that’s easy for your loved one to access. Some homes already have amenities for people with disabilities or mobility impairments, like wheelchair ramps or non-slip flooring, so look for homes with these amenities. Try buying a house in Tennessee located near a health care center or senior living facility as well.
Income
If you expect your income to increase, you may be tempted to buy a more upscale home. However, you need to think about the property taxes associated with an upscale home. There is no state income tax, but higher property taxes can offset your income increases, especially if you need to renovate or expand your home.
Neighborhoods
One city can have dozens of different neighborhoods, some of which are more suitable for families and others for singles, retirees, or young professionals. Spend some time researching neighborhoods and finding the right one for you, including the best neighborhoods in Chattanooga. Once you’ve found the right neighborhood, break the area down and find a location close to the amenities, restaurants, and attractions you want.
Visit Open Houses
Visiting open houses is the best way to see if a home is right for you. Visit several different homes in and around the neighborhood you’ve selected for yourself. Pay close attention to the layout, bedrooms, bathrooms, storage space, foundation, and roofing.
If a home catches your attention, visit it multiple times, including once at night. Learn about the traffic congestion, noise levels, light levels, and other features in the neighborhood. Browse homes with your real estate agent and talk to them to compare notes. Ask them for advice on how to buy a house in Tennessee.
Tailor Your Offer
Don’t rush the process of making an offer for buying a home in Tennessee, even if you’re in a competitive market. The best deal for you takes into account the seller’s wants and needs for their property. If your seller is flipping the property you’re about to buy, they may be willing to lower their asking price. Your seller may also lower their asking price if their home has been on the market for a while or if they’re strapped for cash.
If you’re in a competitive market for buying a house in Tennessee, you may want to make an offer over the asking price. However, you should remember to factor in home values, taxes, insurance payments, and closing costs when you’re buying a home in Tennessee. Talk to your real estate agent and your financial advisor about your offer price for buying a house in Tennessee.
You should make your offer for buying a house in Tennessee contingent on a home appraisal and a home inspection that uncovers no major problems. Your home inspection should include checking for the following:
- Pests, including rodents, termites, and squirrels
- Dry rot
- Hazardous materials, including lead and radon
- Disaster threats, including flooding, landslides, and tornadoes
- Crime statistics in your local area
You may also want to get a home energy audit. Your audit can help you calculate your heating and cooling expenses and determine if you need a new energy system.
If your home inspection is successful, you can finish your home purchase by closing your escrow. You may want to hire a real estate lawyer to negotiate your contract for buying a house in Tennessee. Keep a copy of your deed and title to prove your homeownership.
Figure Out Buying a House in Tennessee
Buying a house in Tennessee requires a few essential yet simple steps. Talk to a financial advisor about how to buy a house in Tennessee. Take a look at your finances and determine how much you can put toward buying a home. If you need assistance, you can get a mortgage or apply for a first-time homebuyer program. Local banks like Bison State Bank and institutions like The Housing Fund can give you the mortgages you want.
Be thorough with your research into homes for sale in Tennessee. Consider the amenities you need now and are going to need in the future and compare several options for homes together. Once you’ve found the right home, you can negotiate and close your offer with your financial advisor, real estate agent, and lawyer.
After selecting the right home, professional support with moving anywhere in Tennessee can coordinate the loading, transportation, and delivery from your current city to your new property.
You can then move out with help from top Chattanooga movers. All Out Moving and Storage has completed over 4,500 successful moves with a 99% customer satisfaction rate. Call 423-716-3025 for a free estimate today.
