10 Steps in Your Tennessee Homebuying Process

Buying your first home can be overwhelming. But if you break it down into simple steps, you can feel much more confident and focus on the excitement of the process rather than the stress of it. Here’s what you can expect when buying a home in Tennessee. 

  1. Save Up for Your Down Payment and Closing Costs
    Before you fill out any paperwork, start saving up for your down payment. Most traditional home loans require 20% of the home’s purchase price up front, while other types of mortgages, like an FHA loan, require much less. Regardless, you’ll want to make sure you have enough on hand to put down a good amount of money. The more you put down up front, the lower your monthly mortgage payments will be. You’ll also need money to pay for your closing costs if you’re not financing them into your mortgage. The average closing costs for a $200,000 home in Tennessee are nearly $4,000.

  2. Clean Up Your Credit
    Check your credit report and credit score before applying for a loan. By law, you can get a free copy of your credit report every 12 months at annualcreditreport.com. Be sure to review your credit report for any errors and dispute them early on in your home buying process. It can take time for credit bureaus to change incorrect information, so cleaning up your credit may take a while.

  3. Determine How Much Home You Can Afford
    Before you start shopping for houses, determine your budget to get a sense idea of what you can afford. Use First National Bank of Middle Tennessee’s simple loan calculator to get started. This will give you and your real estate agent a good idea of your range. Remember, you may get approved for more than you can realistically afford, since most calculators and mortgage companies don’t ask about or factor in every regular expense. It’s wise to add a dose of common sense to any mortgage payment decision to ensure you can comfortably afford your monthly payments.

  4. Get Pre-Approved for a Mortgage
    Another step you’ll want to complete before house shopping is to get pre-approved or pre-qualified for a home loan. This will show sellers you are a serious potential buyer, which can help in the negotiation process. First National Bank of Middle Tennessee can help you get pre-qualified for a mortgage here.

  5. Shop for a Home Within Your Budget
    Now comes the fun part: shopping for your dream home in Tennessee. Before you begin, determine which amenities are non-negotiable for you and which aren’t. It’s also important to consider the neighborhood and quality of local school districts. Ask your friends, family, or First National Bank of Middle Tennessee banker to refer a good real estate agent who can help you navigate the process.

  6. Make an Offer on the House You Want
    When you find the home in Tennessee you’d like to buy, it’s time to make an offer and negotiate. Your real estate agent should be able to guide you through this process and handle everything on your behalf. A good rule of thumb is to offer at least 5% below asking price, but this may vary depending on how “hot” the real estate market is. Make sure you know the selling prices of other comparable homes as well so you can negotiate accordingly.

  7. Put a Deposit Down
    Once you and the seller have both agreed to the home’s purchase price, you’ll need to put down a deposit to show you are serious and secure the home. This money will go into an escrow account.

  8. Submit Your Mortgage Application
    To finance your TN home, you’ll need to submit your mortgage application. First National Bank of Middle Tennessee offers a variety of mortgage options, from fixed-rate mortgages and adjustable-rate mortgages (ARMs) to construction loans, FHA loans, VA loans, and more. Loan payment terms also vary and typically range from 15 to 30 years for most loan types. Talk to your mortgage officer to figure out what works best for you and your family.

  9. Close the Sale on Your TN Home
    You’ll need to have your home inspected before you can move in. Home inspections are a great way to figure out if the house has any major defects before you are locked into the sale. This can also help with your negotiation, as many buyers ask sellers to fix things or lower the price based on the inspection results. Once all terms are met, you will need to deposit the funds and the seller will need to deposit the deed. Depending on where you live, this process may vary. It’s also important to hire an attorney who can walk you through all the paperwork that needs to be signed.

  10. Move Into Your New Tennessee Home
    Once you’ve gone completed the process, you’ll be handed the keys to your new home. Start packing and calling up your friends to help you move, or get ready to hire a moving company. Don’t forget to set the date for your housewarming party!
Buying a home is a major milestone and should be handled with care. Make sure you find friendly and knowledgeable people along the way to help make your homebuying journey as seamless as possible. If you’re ready to talk to a mortgage officer, contact First National Bank of Middle Tennessee today.