Whether you are planning on moving to Nashville or you already live in the area but have committed to taking the next step in your life, buying a house is an exciting and terrifying prospect. It marks a new stage of your life, where terms such as independence, moving forward, and putting down roots are abound. It also represents a significant financial transaction, maybe the single most substantial undertaking of your life. It's good to be a little scared; it means you will be approaching the matter diligently. You will offer it the time and respect it deserves. There are certain things you need to know before buying a home; it takes careful thought. There are plenty of reasons why you would want to live in Tennessee and its beautiful capital. The question is, how much space can you own in this gorgeous city? If you have been wondering how much house you can afford in Nashville, this article is for you.

House vs. Income

No, I am not talking about a battle between a grumpy, know-it-all doctor with a limp and your salary, although that would have made for an interesting episode, but rather, your housing ratio. Not surprisingly, an important factor in determining how much house you can afford is how much you make and how much you will need to spend. What is important to remember is that your mortgage is usually the most significant and most apparent expenditure. It isn't your only cost. There are these pesky utilities that need to be taken care of too. Add the insurance, and you can see it gets a bit more complex. But wait, what about maintenance and repairs? All of these need to be taken into consideration to have a realistic picture of what you can afford. The truth of the matter is that you need to understand real estate loans before applying for a mortgage. That's why we are here.

How much house can you afford in Nashville? If your housing expense ratio is above 36%, it's probably best to work on lowering that number first.

Alt-tag: Dollar bills and a small, wooden house next to a person signing some papers.

Photo by Mohamed Hassan via Pixabay


Bad Things Come in Twos

Well, not necessarily bad things. In our case, ratios. More specifically, your debt-to-income ratio. In all seriousness, these financial indicators are not the bad guys; they are there for a good reason. Yes, primarily to protect lenders, but whether they did it intentionally or not, they are protecting you too. They stop you from getting in over your head, maybe help you get your financial act together, and show you how many square feet you can actually stand to own. A debt-to-income ratio measures how much of your income is going towards repaying your loan. Take all your expenses and monthly obligations and divide them with your salary to find your ratio. There is a threshold that, once passed, will cause lenders to turn a blind eye to your application. By taking care of previous debts, you can turn those numbers in your favor. Therefore, paying off that credit card balance before asking for a mortgage could be the smart play.

Are you Worthy of a Credit?

Before you start browsing through Verified Movers to find a moving company to take your belongings to your new home, you need to be sure your mortgage will be approved. There are several factors lenders take into consideration when deciding your creditworthiness. Here are the main ones that could determine whether or not you qualify for a mortgage:

  • Historia est testis temporum - If history is the teacher of life, then your credit history is the principle that decides if you are going to detention or not. Just like a student who does their homework on time, an individual who pays their bills on time or has never defaulted on a loan and similar can expect a good outcome. In the child's case, he gets to go home. In the adult's case, he gets to buy a home. I feel like this metaphor has been stretched to a breaking point.

  • Back-Ups - Lenders refer to this more professionally as capital, but essentially they refer to anything you can use to pay them back in case you lose your primary source of income. Savings and investments, for example, will give you an edge.

  • Can you do it - How much house can you afford in Nashville? Depends on your capacity to pay back your loan. Income, employment history, and other factors determine your creditworthiness.

  • The final backup - Your house. It will be used as collateral in case you cannot make the payments.

Take care of those past debts to get approved for new debt. Makes perfect sense!

Alt-tag: A person holding a credit card in front of an open laptop.

Photo by RUPixen via Unsplash


Don't Let Down Payments Get you Down

There was once a time when a five percent down payment was all that was required of future homeowners. That was a time before a couple of major events shook up the global economy and the real estate market along with it. For most of the country, twenty percent is the new norm, and Nashville is no exception. What this translates to is that even if you have a high salary and good job security, without a healthy savings account, it's still not enough. Save up before going house hunting. Twenty percent is a hefty amount, so you need to be prepared.

It looks like a scene from an action movie, but it's an excellent visual representation of the fact that you'll need to set aside some serious savings.

Alt-tag: Stacked and bound bills in a silver suitcase.

Photo by Pixabay via Pexels


Tennessee Housing Development Agency

Or, THDA for short, is something I wanted to quickly draw your attention to. All of the above points may seem a little overwhelming, especially for first-time homebuyers. Fear not, the THDA has a few programs set in place that are here to help this demographic, specifically. It provides special terms and conditions that can help first-time buyers get over some of the hurdles. Who knows, it could mean you can afford a little more house than you may have expected.

Can't Help Falling in Love with Tennessee

The above points should help you understand more clearly what kind of house you can afford to purchase, but there is one more cost to consider. Once you make the purchase, you will need to move. Relocating can be tricky and expensive, although it primarily depends on how you go about it. Long-distance moves in Tennessee can seem daunting, especially if you decide to go it alone. Still, there is another option. It can be an easy process with the help of experts, so be sure to choose the best long-distance movers for you. It will save you time and money. So as you are setting aside for that down payment, add a little on top for the relocation itself.

What are you waiting for? Get that calculator out and start crunching those numbers!

There are plenty of things to love about Nashville, and the appeal of moving to Tennessee's capital is obvious. The question is, can you purchase your perfect property? At the end of the day, how much house you can afford in Nashville will depend on your financial discipline and past track record. Save for that down payment, pay off those car loans, secure a stable source of income, put a little money on the side, and once all this is done, stride up to the bank confidently and hand in your application. We hope we have removed the terrifying part of this massive step out of the equation. By our calculations, that only leaves the exciting portion!