The current mortgage rates forecast calls for cautious optimism, predicting that rates will remain roughly where they are in the short term and trend downward over the course of the year.
LendingTree senior economist Jacob Channel doesn’t foresee any dramatic changes in 2024. That’s both good news and bad news — good for Americans worried that a housing market crash is around the corner, but bad for those hoping to see dramatic changes in home prices or affordability.
There are complex calculations and factors determining the mortgage rates lenders can offer you. However, there are also some simple steps you can take right now to get the best mortgage rate:
Once you find a house you love and get approved for a loan, you can reach out to your lender about a mortgage rate lock. The lock freezes your interest rate, so you won’t have to worry about it getting more expensive while you complete the closing process.
The Tennessee Housing Development Agency (THDA) offers Great Choice loans to middle-income borrowers who want to purchase a home in the Volunteer State.
Great Choice loans can be conventional, FHA, VA or USDA loans, but will always come with fixed interest rates. That means affordable, predictable payments that won’t change over time and are spread out over 30 years.
Borrowers must:
Have a minimum 640 credit score
Make a minimum down payment of 0% (USDA), 3.5% (FHA) or 22% (conventional)
Meet the program’s income and purchase price limits
Complete a homebuyer education course
THDA also offers down payment assistance, which can only be used with a Great Choice Home Loan. Your assistance funds will come in the form of a second mortgage and the money can be used to cover a down payment or closing costs. Borrowers can choose between two types of down payment assistance:
Amortizing:
Deferred:
Borrowers must:
Use the program in conjunction with a Great Choice home loan from THDA
First-time homebuyers who want to own a newly built home have a unique opportunity to purchase their home at a very low interest rate. New Start offers 30-year loans with interest rates starting at 0% and capped at half of THDA’s standard home loans.
Borrowers must:
Be first-time homebuyers or a qualified military veteran or purchase a home in a targeted area
Earn within the program’s income limits, which range from $50,280 to $71,750, depending on your location and household size
Purchase a house for $200,000 or less
Complete a homebuyer education class
People who have never owned a home
People who haven’t owned a principal residence in the last three years
→ Tennessee conventional loans. Conventional loans can be a great choice for borrowers with a good credit score, even if they don’t have a huge down payment saved up. However, you’ll need to meet the minimum requirements set by Fannie Mae and Freddie Mac.
→ Tennessee FHA loans. FHA loan requirements provide an alternative for borrowers who have lower credit scores or otherwise can’t meet conventional loan requirements. You can qualify with a credit score as low as 500, but you’ll have to make at least a 10% down payment. If your preference is to make a smaller down payment, you can put down as little as 3.5% as long as you have at least a 580 credit score.
→ Tennessee VA loans. VA loan requirements are even more accessible, and come with some great perks — these include the ability to put 0% down without paying for mortgage insurance.
→ Tennessee streamline refinances are for borrowers who want to replace a current FHA or VA loan with another loan of the same type. To do this, you’ll use an FHA streamline refinance loan or VA interest rate reduction refinance loan (IRRRL). They’re called “streamline” because they don’t require as much time or paperwork as standard refinances.
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