# Tennessee Mortgage Calculator | Ascension

## Tennessee Real Estate Market

Tennessee is a relatively inexpensive real estate market, compared to the rest of the United States. The median home value in Tennessee is \$ 200,762, according to Zillow. That’s about 24% lower than the median home value in the United States, which currently sits at \$ 262,604.

Real estate prices increased in 2020 in the United States. This was fueled by a combination of record mortgage rates and historically low housing supply. Nationally, the median home value has increased 6.6% in the past year. The Tennessee market was even hotter – the typical home saw its value increase 8.1% from a year ago.

## How do I calculate my mortgage payment?

The short answer is that it’s hard to calculate a mortgage payment by hand. The easiest way to do this is to use a Tennessee mortgage calculator like the one at the top of this article. But if you insist on doing it for the long haul, here is the mortgage payment formula.

Let’s say you borrow \$ 200,000 to buy a house and take out a 30-year mortgage with an interest rate of 3%.

You would use 200,000 as the principal, 360 for the number of months, and 0.03 as the interest rate. This would translate to a monthly principal and interest payment of approximately \$ 843.

Whether you’re into math and want to calculate your payment by hand or use a Tennessee mortgage calculator, it’s important to understand the different types of costs that go into your mortgage payment. A common misconception among first-time home buyers is that the mortgage payment is only made up of the principal and interest on the money you borrow. But as you’ll see from this list, that’s not the whole story.

### House price and down payment

The first element of your mortgage payment is the principal repayment, which is the amount of money you borrow from the mortgage lender. This is determined by two main factors: how much you are willing to pay for the house and your down payment.

For example, if you agree to buy a house for \$ 200,000 and put 10% (\$ 20,000) down, your principal loan amount will be \$ 200,000 (house value) – 20,000 \$ (down payment) = \$ 180,000 (amount from your lender).

You can vary your down payment amount and the value of your home in the Tennessee Mortgage Calculator above to get an idea of â€‹â€‹how principal affects your monthly mortgage payment.

### Interest

Your interest rate determines the fees you will have to pay to borrow money. This is an annual percentage. In our Tennessee mortgage calculator above, you can experiment with different interest rates to see their impact on your mortgage payment.

For example, if you owe \$ 200,000 and have an interest rate of 5%, your interest accrues at a rate of \$ 10,000 per year (because \$ 10,000 is 5% of \$ 200,000). However, each time you make a payment, the amount you owe goes down. As a result, interest accumulates more slowly over time. This concept is known as mortgage amortization.

If you’re curious about how much of each mortgage payment will be used for principal and interest, ask your lender for a document known as a Amortization schedule.

And if you’re curious about what mortgage rate to expect, check out current Tennessee mortgage rates.

### Mortgage term

Most home buyers in the United States choose a 30-year mortgage with a fixed interest rate. Other terms are available, ranging from 10 to 30 years. Usually a longer term means a lower monthly payment, but it also means you’ll pay more interest over time.

And generally speaking, you can get a lower interest rate if you’re willing to go for a shorter term.

Wondering how this affects you? Try using the Tennessee Mortgage Payment Calculator above to calculate the monthly payment for a 20-year loan versus a 30-year loan. You can even look at 20-year mortgage interest rates to get an idea of â€‹â€‹the difference in interest charges.

### Property taxes and insurance

Virtually all mortgage lenders require homeowners to pay property taxes and insurance with their mortgage payments. In this way, the lender is assured that these expenses are paid. For this reason, mortgage payments are often referred to as PITI (principal, interest, taxes and insurance).

These expenses can be difficult to estimate before you start shopping for a home. If you don’t know those numbers yet, don’t panic – we’ve automatically populated the sample numbers in the Tennessee Mortgage Calculator above, so you can get a rough estimate of monthly mortgage costs. Once you have chosen a particular house, the exact numbers for these items will not be difficult to find. Property taxes are publicly available and you can easily get a home insurance quote.

It’s also worth noting that if you live in a neighborhood with an association of homeowners or co-owners, it’s not uncommon for the lender to ask you to pay these dues with your monthly mortgage payment as well. We have a place for you to include this in the Tennessee Mortgage Calculator above (click “Additional Entries”).

## What to Know Before Buying a Home in Tennessee

Tennessee has below average property tax rates. According to data from the US Census Bureau, the median property tax bill in Tennessee is 0.68% of the value of the home. This makes Tennessee one of the 10 states with the lowest taxes.

However, it should be noted that property taxes are somewhat determined by local governments, not just states. Property taxes can vary widely depending on where you are in Tennessee. You may want to look at the property taxes for a few areas you are considering moving to, then use those numbers in the Tennessee Mortgage Calculator above to get a better idea of â€‹â€‹your potential mortgage payments.

According to Insurance.com, home insurance premiums in Tennessee are the 16th most expensive in the country. It can also vary widely depending on the house and location.

## Tips for first-time home buyers in Tennessee

Tennessee has a great loan program for first-time homebuyers called the Great Choice Home Loan program, created by the Tennessee Housing Development Agency. The loan is designed for middle to moderate income households, which vary by county.

The Great Choice Home Loan is a 30 year fixed rate mortgage product that requires a minimum credit score of 640 from all participants on the application. The loans have a minimum down payment of 3.5% (most are technically FHA loans). But homeowners who use the program can also use the Great Choice Plus down payment assistance program to get up to \$ 7,500 more for their down payment and closing costs. To be clear, the down payment assistance is a second to lend, not a grant. But he can get Tennessee homebuyers a no-down mortgage in many cases.

Whether you are buying for the first time or refinancing an existing property, be sure to research the best mortgage lenders or the best refinance lenders to get the right deal for you. Use a Tennessee mortgage calculator (like the one above) to make sure your mortgage is within your budget, then enjoy your new home.