Tennessee home loans: payments, recordation taxes and THDA help

#Prices against Tennessee paychecks

Tennessee’s median home value of $332,600 is below the national median, and its median household income of $71,997 is below the national figure — the 11th-lowest of the 50 states and DC. Put together, the median home costs 4.6 times the median income, the 17th-highest ratio in the country and above the US ratio of 4.4.

Nashville’s median value is higher than the state’s and its effective tax rate is higher; the Nashville housing guide covers Metro’s numbers and local programs in detail.

#The median Tennessee home, month by month

The insurance line uses Freddie Mac’s national average per $1,000 of value; Tennessee premiums vary with roof age, storm exposure and the insurer, so price a policy early. Try other prices or down payments in the mortgage payment calculator.

#How much house a Tennessee median income buys

On $71,997 a year, Freddie Mac’s guideline of spending no more than 30% of gross income on housing allows $1,800 a month. With 10% down at today’s average rate, the state tax ratio and the national insurance average, that supports a home of about $244,000 — $88,600 less than the median value. Buying the median home within the guideline takes a household income of roughly $98,000. The affordability calculator shows what your own income and debts support.

#Tennessee’s transfer tax and mortgage tax at closing

Tennessee taxes both documents you record when you buy with a loan. The realty transfer tax is 0.37% of the purchase price, and the mortgage tax is 0.115% of the debt above the first $2,000.

Your purchase contract sets which side pays the transfer tax. The mortgage tax is tied to your loan, so it normally sits with the buyer’s costs, and a larger down payment trims it. Add lender fees, title insurance and prepaid items and the CFPB’s typical range of 2%–5% comes to $6,652–$16,630 on the median home. The closing cost calculator applies both Tennessee taxes automatically.

#THDA Great Choice Plus: deferred or amortizing

The Tennessee Housing Development Agency’s Great Choice Home Loan is a 30-year fixed-rate mortgage, most often insured by FHA or USDA, made through participating lenders. Every borrower needs a credit score of at least 640, and a homebuyer education class is required if you take down payment assistance. Great Choice Plus offers two kinds:

On the median home the amortizing option could reach $15,000 (the cap applies on the median home), which at the example rate adds about $102 a month. The deferred option adds nothing to the payment but has to be repaid if you leave early, so weigh how long you expect to stay. THDA serves first-time, repeat and military buyers; see homebuyer education for what the class covers.

#Below-average property tax rates, set by counties and cities

Tennessee’s effective rate of 0.45% is the 6th-lowest among the 50 states and DC. The median homeowner pays $1,488 a year, $1,723 less than the national median bill of $3,211. Rates are set locally, and a home inside city limits can owe both a county and a city rate, so compare the tax history of each listing rather than relying on a statewide average.