Financial Literacy | Nov 4, 2025

5 Tips for First-Time Homebuyers in Tennessee

Buying your first home is a major milestone. It can be exciting, rewarding, and occasionally overwhelming. Whether you’re planning to settle in a fast-growing city or looking for a quiet community in rural Tennessee, the proper preparation can make all the difference. These five tips can help first-time homebuyers in Tennessee feel more confident, avoid common pitfalls, and take advantage of valuable resources.

1. Check Your Credit Score and Strengthen It Early

Your credit score plays a significant role in your mortgage application. It helps lenders assess how likely you are to repay the loan. A stronger score can improve your chances of qualifying and may lead to better loan terms.

Before you start house hunting, request a copy of your credit report. Look for errors, pay down debt, and avoid opening new credit accounts. In Tennessee, state-sponsored mortgage programs often require a minimum credit score of 640 to qualify [1].

Improving your credit takes time, so start several months before applying for a loan. Even a slight boost in your score could save you thousands over the life of a mortgage.

2. Budget for More Than Just the Mortgage

Buying a home involves more than just the monthly payment. First-time buyers sometimes focus only on the mortgage and forget other ongoing costs. Property taxes, homeowner’s insurance, utilities, and maintenance must fit your budget.

You’ll also need to cover upfront expenses like the down payment and closing costs. While many believe they need 20 percent down, most first-time buyers put down closer to 9 percent [2]. Government-backed loans like FHA or USDA may allow as little as 3.5 percent or even zero down in some rural areas [3].

Be sure to save extra for emergencies, especially during your first year as a homeowner. Financial experts recommend having a cushion of at least three months of living expenses, separate from your down payment [4].

3. Get Pre-Approved for a Mortgage

A mortgage pre-approval gives you a clear picture of how much home you can afford. It also shows sellers that you’re a serious buyer. Many agents and sellers in Tennessee won’t accept offers without one.

Getting pre-approved means a lender has reviewed your credit, income, and debt to determine how much you can borrow. This can help you avoid looking at homes outside your price range and give you a competitive edge in tight markets.

If possible, compare offers from a few different lenders. Even a slight difference in interest rates or fees can greatly impact your total cost over time [5].

4. Explore Tennessee’s First-Time Buyer Programs

Tennessee offers several helpful programs for first-time homebuyers. The Tennessee Housing Development Agency (THDA) provides affordable 30-year fixed-rate loans and down payment assistance for qualified buyers through the Great Choice Home Loan program.

You must meet income and purchase price limits and complete a homebuyer education course to qualify. THDA also offers additional support through the Great Choice Plus program. This can provide up to 5 percent of the purchase price as a second loan or $6,000 as a deferred, forgivable loan to help cover closing costs [6].

Programs for veterans, active-duty service members, and buyers in targeted areas also exist. You may be surprised by how much assistance is available, so it’s worth reviewing the THDA website or speaking with a participating lender.

5. Work with Local Lenders and Real Estate Experts

Buying a home is a big financial decision, and having the right team in your corner makes a huge difference. Local lenders and real estate agents understand the Tennessee housing market. They can help you navigate regional pricing, tax rules, and loan options.

Local banks are often familiar with THDA programs and can guide you through the process step by step. They’re also more likely to offer personalized service and ongoing support after closing.

When interviewing lenders, ask if they have experience with first-time buyer programs. A knowledgeable partner can help you find the right loan, avoid common mistakes, and feel confident as you move forward.

Conclusion

Your first home purchase is more than just a transaction; it’s a major life event. You can make a confident and informed decision with careful planning, smart budgeting, and the right team.

Tennessee has much to offer first-time buyers, from affordable loan programs to local support. By following these five tips, you’ll be one step closer to opening the front door of your new home.

Looking for guidance?

One Bank of Tennessee is here to help first-time buyers every step of the way. To learn more, visit us online at onebanktn.com/mortgage/ or call us at (800) 368-2498 to connect with one of our lenders.

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