Tennessee Mortgage Calculator

Best mortgage lenders in Tennessee

The most widely recognized mortgage lenders in Tennessee operate nationwide. These include such recognizable names as Securitas Mortgage Inc, Rocket Mortgage, Advanced Mortgage & Investment Company (AMIC). Several lesser known but trustworthy options include Tennessee-based Nashville Mortgage Company, Tennessee Trust Mortgage Inc.

How to calculate mortgage payment in Tennessee

Use our user-friendly mortgage calculator TN to evaluate your future monthly expenses. A detailed step-by-step instruction follows below.

Why and How to Use Our Mortgage Calculator

Use our house payment calculator Tennessee for thorough planning of your future spendings. Let’s take a closer look at each field in order to gain a better understanding of the mortgage in Tennessee parameters.

Firstly, consider the home price – this represents the amount you intend to invest in your future property. The down payment is the upfront portion of this price. To avoid expensive insurance premiums, it's advisable to provide a minimum of 20% down payment, especially for conventional loans. The remaining amount constitutes the principal, typically 80% of the home price when you have a 20% down payment.

A loan term is the period of full repayment of your mortgage by making scheduled payments. Fixed-rate conforming loans are allowed to last 30 years most, while adjustable-rate options typically have shorter terms.

An interest rate is a fixed or variable percentage of the principal that you'll pay over the loan's duration. It's important to note that you're actually charged an annual percentage rate (APR), which isn't precisely the same as the interest rate. While the interest rate forms the majority of the APR, the latter also encompasses various fees such as origination fees, closing costs, and insurance payments.

For more precise assessment, the interest rate used for these calculations is based on the current mortgage rates in Tennessee, given a $400,000 home price and a 10% down payment.

Median property taxes in Tennessee counties

The property tax is another important thing to consider when selecting your future house. Many lenders insist on setting up a mortgage escrow account to ensure the borrower’s keeping up with the tax and insurance costs.

Source: American Communities Survey 2016, U.S. Census

Tennessee Housing Market 2024

The past year has seen a steep increase in the market value of housing in Tennessee. This continues a longstanding trend amplified by the COVID pandemic. Nevertheless, the pace of growth has diminished compared to the previous year, while both purchase and refinance rates have been on the increase for some time and are expected to rise further in the near future.

How do I calculate my mortgage payment?

The most convenient way to do this is to make use of our calculator. It's powered by a simple formula, which you can also use to calculate the amount to be paid by hand:

M = P*i(1 + i)^n / (1 + i)^n – 1

M – estimated monthly mortgage payment;

P – principal;

I – monthly interest rate (to determine it, divide your annual mortgage rate by 12);

N – the loan term expressed in months (in other words, the overall number of monthly payments)

Imagine you are applying for a 15-year mortgage loan with a fixed 6.99% APR (which is .0699 as a unit fraction). The house costs $500k, with 10% ($50,000) to be paid down. The principal amount (P) will be equal to 90% of the initial home cost ($500,000 – $50,000 = $450,000).

I = .0699 % / 12 = .005825%.

Finally, let’s convert the loan length from years to months: N = 15 * 12 = 180.

M ($) = 450,000*.005825(1 + .005825)^180 / (1 + .005825)^180 – 1 ≈ 4042.

So, you are going to pay about $4042 a month.

It is important to note that the calculated M value is approximate, as no extra fees are taken into account.

Tips for first-time home buyers in Tennessee

To begin with, there are several federal agencies, namely USDA, FHA, and VA, that offer loan guarantees to eligible borrowers. These programs provide a range of options that can align with the financial constraints of many first-time homebuyers.

In addition to these government-backed initiatives, it's worthwhile to explore opportunities provided by the Tennessee Housing Corporation (UHC) for residents of Tennessee. Specifically, first-time homebuyers can apply for the FirstHome program, which offers assistance with down payments and closing costs, provided they qualify for an FHA loan and have a FICO score of at least 660. This program covers up to 6% of the loan amount for either down payment or closing costs. It's important to note that this assistance is offered in the form of a 30-year-fixed-rate second loan. If you don't meet the criteria for the FirstHome program, there's no need to lose hope. The Tennessee Housing Score Loan is an alternative program that provides up to 4% in assistance, with a minimum acceptable credit score of 620.

Some useful tips for first-timers:

1. Obtain pre-approval in advance, as it enhances your credibility in the eyes of potential sellers. It's highly recommended to obtain pre-approval letters from not just one, but at least two or three different lenders.
2. Compare mortgage rates from various lenders. Consider at least three lenders to ensure you secure the most favorable terms for your mortgage.
3. Conduct preliminary financial planning based on the amount you've been pre-approved for. This will help you budget for future expenses effectively.
4. Begin saving for a down payment as early as possible. A larger down payment reduces the principal amount, which, in turn, can lower your overall expenses. Therefore, initiating your savings early is crucial.
5. If you're eligible for a VA loan, prioritize this option.
6. Explore government-backed plans and local assistance programs. These initiatives often present enticing benefits, so be sure not to overlook them.
7. If feasible, work on paying off any existing debts before applying for a mortgage. Reducing your outstanding debts can improve your financial standing and increase your chances of securing a favorable mortgage offer.