FHA for first time buyers in Memphis

The tax line changes the whole calculation

Memphis city and Shelby County rates stack to roughly 1.30% of value a year, close to double the Tennessee average of 0.67%.

On a $320,000 house that is about $347 a month in property tax alone, against roughly $179 in a county at the state average. That difference decides what you qualify for before the rate is even discussed.

Why FHA still fits here

FHA's 3.5% down and flexible credit treatment suit a first purchase, and there is no minimum time in the job that a steady income cannot satisfy.

The trade is mortgage insurance for the life of the loan under 10% down. In a market where values have moved, that is a refinance conversation at the two year mark, not a thirty year sentence.

• 3.5% down, and it can be gifted
• Sellers can contribute toward closing costs
• Credit is judged with compensating factors
• Suburban Shelby carries a lower tax rate than the city

The suburbs are a different number

Germantown, Collierville, Bartlett and Cordova sit around 0.90% rather than 1.30%. On the same house that is over a hundred dollars a month.

It is worth knowing before you choose a search area rather than after.

Questions people ask