The two main types of mortgages preferred in Tennessee are the fixed rate mortgage and the adjustable rate mortgage. While other mortgages are allowed in the state, it is rare for an interest only, balloon or jumbo mortgage to be granted. Fixed rate mortgages come in 10, 15, 20, 25, 30 and 40 year increments. Adjustable rate mortgages tend to be in either 15 or 30 year allotments. FHA and VA backed mortgages are encouraged. Mortgages in Tennessee are non-recourse mortgages, meaning that in the event of default creditors cannot go after the borrower for any funds not collected.
Tennessee Mortgage Rates
Tennessee mortgage rates vary throughout the state. While, on average, the mortgage rates are equal to that throughout the nation, some areas see higher rates while others see below national rates. Larger cities, such as Memphis, tend to have higher interest rates in Tennessee because of the increased prices of homes. Larger cities in the state have home prices that are well above the national median average. On the flip side, the rural parts of Tennessee have lower than median prices and have lower interest rates. Mortgage interest rates will be based on many factors including applicant’s credit and down payment, area the house is located in, and type of mortgage secured. Adjustable rate mortgages will always have a lower initial interest rate.
Tennessee Refinance Rates
Refinancing in Tennessee is comparable in their rates to a standard mortgage. Refinance loans can be done as either adjustable rate loans or fixed rate mortgages. Interest rates will be determined by the same qualifications as a first mortgage. If equity in the home is used during the refinancing the interest rate may be slightly higher.
Tennessee Mortgage Brokers And Lenders
All financial institutions that grant mortgages can do so in the state of Tennessee. This includes private and corporate banks, credit unions, private financial groups and internet transactions. Many of the lenders in the state will offer special incentives on loans as a way to compete with the other banks. This may include a lower down payment requirement, first time home buyers program, ability to purchase points or other company specific promotion. These lenders may also offer special programs for people with bad credit.