Home Loans In Knoxville

Known to many as the Marble City, Knoxville was the first-ever capital of Tennessee before relinquishing the title to Nashville. Its real estate market has gone through ups and downs, especially amid the pandemic. However, things are starting to heat up now, with home prices expected to grow even more in the coming months.

With an economy that is slowly but surely bouncing back, now may be a great time to look into homeownership in Knoxville. Our mortgage experts at Capital Home Mortgage help you find the best financing options if you’re thinking about purchasing a home or investment property in Knoxville. 

Let’s walk you through the main requirements for obtaining a home loan in Knoxville, TN.

6 Must-Have Requirements for Acquiring a Mortgage in Knoxville

   1. Down Payment

Your down payment is the most significant factor determining how much house you can afford. It’s also one of the most common questions we get from homebuyers. The actual amount will depend on the type of loan. 

However, if you can afford it, try to raise a down payment of at least 20% to reduce the loan amount and enjoy fringe benefits such as not paying private mortgage insurance. 

   2. Good Credit Score

Your credit score is critical for a home loan. The minimum credit score for an FHA loan is 580. The conventional loan is 620. For a VA loan, 0%. 

However, it’s still essential to get your credit score as high as possible before filing your loan application. A higher credit score will increase your chances of approval for a loan and help you get a lower interest rate.

   3. Income & Employment History

Lenders will want to see that you have a steady income and employment history. This is to ensure that you can make your monthly loan payments. W-2 forms and pay stubs are the most common documentary requirements for proof of employment. 

On the other hand, if you are currently self-employed, you’ll need to provide additional documentation, such as tax returns, business profit-and-loss statements, and bank statements. 

   4. Debt-to-Income Ratio

Your debt-to-income (DTI) ratio measures how much debt you have relative to your income. Lenders use it to determine whether or not they can afford a loan.

The maximum DTI ratio for an FHA loan is 43%. For a conventional loan, it’s 50%. And for a VA loan, it’s 41%.

   5. Closing Costs

These are fees associated with closing the deal.  They can include the following:

• Recording fees
• Title insurance fees
• Processing fees
• Inspection costs
• Closing fees
• Escrow fees
• Origination fees
• Prepaid interest
• Survey fees

Your loan officer will explain these to you in detail and list all the fees you’re expected to pay to close the deal. 

Knoxville Mortgage Lender

At Capital Home Mortgage Knoxville, we assist you in every step of the homebuying process. Whether you’re a first-time homebuyer or a seasoned veteran, our team of experts can help you find the right loan for your needs.

We offer a variety of loan programs, including FHA loans, VA loans, and conventional loans. As a direct Knoxville mortgage lender, we own the entire process from application to funding. This allows us to help you find the best financing option for your situation and offer competitive interest rates and low fees. 

Start Your Home Loan Application In Knoxville Today!

Capital Home Mortgage understands that the home loan process can be overwhelming, especially for first-time homebuyers. Our team is here to provide any needed help to ensure a hassle-free experience.

Get started with a free quote by calling (615) 549-5666. We look forward to assisting you in your home buying journey in Knoxville.