Buying a Home in the Nashville Area: Your Downpayment & Savings

When buying a home in the Nashville area, one of the first things many buyers do is start looking at Nashville area real estate listings online, in real estate newspaper ads and in RE magazines.  Some buyers also read articles like this one in order to gather as much information as possible.

Brian Patterson, Licensed Real Estate Broker Serving NashvilleFranklinBrentwood & Spring Hill, TN - Call Today!  615.438.4941 

If you are a buyer, one of the first things you should do, before you even talk to a REALTOR® or shop for interest rates, is take a good look at your savings and the money you have available for your downpayment and closing costs.

How much money you have available for your down payment and closing costs affects almost every aspect of buying a home in the Nashville area, including the following: 

  • How you write your purchase offer  
  • The different loan programs you qualify for
  • Shopping for interest rates

Downpayment & Mortgage Programs

 How much downpayment you have available or don't have, affects your options.

  • If you only have enough available for a minimum down payment as savings, your choices of loan programs will be limited to only a few types of mortgages.
  • If another party is giving you a gift for all or part of the down payment, your options are also limited. 
  • If you have enough for the down payment, but need the lender or seller to cover all or part of your closing costs, this further limits your options.  
  • If you borrow all or a portion of the down payment from your 401K or retirement plan, different loan programs have different rules on how you qualify as well.

However, if you have saved enough for a large down payment, then you have lots of choices, which includes such varied programs as:  conventional fixed rate loans, adjustable rate mortgages, buydowns, VA, FHA, graduated payment mortgages and all the varieties of each.

Shopping for Rates

Also, if you are planning on buying a home in the Nashville area, one very important reason to have at least some idea of your down payment is for shopping for interest rates.  

Some loan programs charge a slightly higher interest rate for minimal down payments - and the interest rates for different loan programs are not the same.  Conventional, VA  and FHA all offer fixed rate loans, but the rates vary from one program to another.

If you plan to shop lenders by phone, the loan officer will be able to tell you which programs fit and quote you rates accordingly.  However, if you are shopping on the Internet, you will need to develop some idea of your loan program on your own.

Your Downpayment & Writing Your Offer

Another reason you need to have an idea about your down payment is that it affects how you write your offer to purchase a home in the Nashville area

Not only will you be required to put your down payment information in the offer, but  different loan programs have different rules that also affect how you write your offer. This is especially important when dealing with FHA and VA loans.

Asking the Seller to Pay All or Part of Your Closing Costs

If you are asking the seller to pay all or part of your closing costs, you have to ensure that your loan program allows what you are asking.  For smaller down payments, lenders allow the seller to pay less closing costs than for larger down payments. some loan programs allow a seller to pay certain types of costs, but not others.

Your Downpayment & Qualifying for A Loan

Last but not least, your downpayment affects your ability to qualify for a loan. When you make a small down payment, lenders are more strict about having you conform to their underwriting guidelines. Lenders are more likely to make allowances or exceptions to the rules with larger down payments.

Give us a call today and we will put you in touch with one of our highly-qualified, preferred lenders! 615.438.4941

Our lenders are committed to providing a stress-free experience that focuses on communication every step of the way! 

As you can see, your downpayment and the money you have available for it basically affects every choice you make when buying a home in the Nashville area.  

Home Buyer Tips & Related Articles

Brian Patterson, Licensed Real Estate Broker Serving NashvilleFranklinBrentwood & Spring Hill, TN - Call Today!  615.438.4941 

Whether you are interested in buying a home in the Nashville area or sell your existing home, our team of experienced real estate professionals is 100% committed, and will work relentlessly to make sure your experience is a positive and rewarding one!  

We focus our comprehensive buyer-client real estate services in the following Greater Nashville communities:

Over 15 Years Experience Helping Buyers & Sellers!!
"The Realtor Who Knows Construction"

We look forward to helping you achieve your Greater Nashville area real estate goals. We Brian Patterson Associate Broker RE/MAX Fine Homesinvite you to give us a call or send us an email today!  

Brian Patterson
Associate Broker
RE/MAX Fine Homes
1624 Westgate Circle Suite 125 
Brentwood, Tn 37027
Cell: (Direct615.438.4941