Buying your first home can be super overwhelming and scary. Many people are still under the impression that you need 20% down to buy a home in Tennessee. However, that is just not the case. There are many loan programs which offer first time homebuyer assistance in Tennessee. These include low downpayment options and even programs that assist in paying a portion (or all) of the downpayment. We recommend asking your lender (or a couple of lenders) what programs their company offers. Here are a couple of loan options that are great for a first time homebuyer.
FHA LOANS
One loan option many first time homebuyers use is the FHA (Federal Housing Administration) loan. Basically the Federal Housing Administration insures the loan so your lender can offer you a better deal. Not only can you qualify for this with lower credit scores than most lenders will accept you can put as little as 3.5% down. If this is a program you are interested in please reach out to us so we can connect you with a lender that offers the FHA loan program.
THE GREAT CHOICE LOAN PROGRAM
Now if you are struggling with saving for a downpayment (or just want some help), the state of Tennessee offer a great program called the Great Choice Loan Program which offers qualified Tennessee residents up to 4% downpayment assistance. This assistance can be used in congruence with a FHA, VA, USDA-Rural Development and uninsured conventional loans. There are some restrictions for this program. To qualify you must have a satisfactory credit score, make less money then the income cap (varies for different counties), and the house must not be priced lower than the maximum purchase price cap for that county. For example, in Davidson county as of June 2016 the income level restriction for a household of 1-2 people is $82,200 and the max price of a home is $375,000. In addition to meeting these requirements, you must take a home buyer education course before closing on the home which is packed with GREAT information. To see if you meet these requirements please reach out to your lender or contact us directly.
If you wish to stick to a conventional loan program we know lenders that can go as low as 3-5% down. Now just remember, with lower down payments lenders will usually require you pay Private Mortgage Insurance (PMI) on top of the mortgage – this just insures the lender in case you default on the loan.
All in all – there are so many great options for first time homebuyers to make the move into home ownership! We offer complimentary first time home buyer consults to really walk you through the process and educate you on making the best decision for you! If you have questions or concerns about the lending process we will even have a lender at the meeting to talk to you about your options. You really have nothing to lose! 🙂
To sign up for a first time homebuyer consult please email Lisa at lisa@nashvilleonthemarket.com or call her directly at 615-310-8661.
