Mortgage & Loan Documents in Tennessee

Home financing in Tennessee involves several legal instruments that are filed within the public record. For buyers and homeowners, these documents are vital for tracing the financial history of a property and ensuring that all debts have been properly cleared before a title is transferred.

What Is a Mortgage?

A mortgage is a legal agreement where a borrower pledges their real estate to a lender as security for a loan. In the Volunteer State, the specific document used is called a deed of trust. This document allows a third-party trustee to hold the legal title to the property until the debt is paid in full.

What Is a Home Loan?

A home loan is the actual sum of money borrowed from a lender to purchase or refinance real estate. It is the financial obligation, defined by a promissory note, which outlines the repayment terms, interest rate, and schedule. The home loan is secured by the mortgage or deed of trust. Note that all mortgages are loans, but not all loans are mortgages.

Mortgage vs. Home Loan: What’s the Difference?

A home loan is a private contract between the borrower and the lender, which includes the interest rate and the monthly payment terms. The deed of trust or mortgage is the public document that identifies the property as collateral and gives the lender the right to foreclose if the loan is not paid.

Why They Matter for Buyers and Homeowners

Mortgage-related records are important for homeowners and buyers because they allow for:

• Verifying Debt on a Property: These records provide information on what lenders have claims against the title.

• Checking for Existing Liens: They help identify primary mortgages, second mortgages, or Home Equity Lines of Credit (HELOCs) that must be paid off at sale.

• Understanding Ownership History: Mortgage records help the public find when properties were purchased and refinanced.

• Conducting Due Diligence: Mortgage records are essential for buyers, investors, and title companies to ensure a transaction can proceed cleanly.

Common Types of Home Loans in Tennessee

Common home loan categories found in Tennessee public records include the following:

• Conventional Loans: These are private-sector loans not insured by the federal government. Currently, conforming loan limits for single-family homes in Tennessee typically start at $806,500, with higher limits up to $989,000 in high-cost counties.

• FHA Loans: Insured by the Federal Housing Administration, these are common for first-time buyers due to lower down payment requirements (as low as 3.5%).

• VA Loans: These loans are guaranteed by the Department of Veterans Affairs for eligible veterans and service members. They often feature 0% down payments.

• USDA Loans: Backed by the United States Department of Agriculture and targeted at rural development, these loans are for low-to-moderate income borrowers in designated rural areas.

• THDA (Great Choice) Loans : The Tennessee Housing Development Agency (THDA) provides 30-year fixed-rate loans often paired with down payment assistance. These may appear in public records as a primary deed of trust with a second, subordinate deed of trust for the assistance amount.

• Jumbo Loans: These are non-conforming conventional loans that exceed standard federal lending limits. They are used for high-value properties, particularly in Tennessee’s growing metropolitan markets.

• Equity-Based Loans: These include Home Equity Loans (second mortgages) and Home Equity Lines of Credit (HELOCs).

What Mortgage Documents Become Public Record?

While your private financial data, such as credit score or bank balance, remains private, the following mortgage documents become public records once filed with the County Register of Deeds:

• Deed of Trust: The main document securing the loan

• Assignments: Recorded when one bank sells your mortgage to another lender

• Substitution of Trustee: Recorded if the lender changes the party responsible for the foreclosure process

• Release of Lien (Satisfaction): Filed once the loan is fully paid off

What Information Appears in Mortgage Records in Tennessee?

Tennessee mortgage records contain the following important details about the loan and property:

• Borrower and Lender Information: The names and addresses of the borrower and the secured party/lender

• Property Identification: A thorough legal description of the property, its physical address (unless vacant), tax parcel number, and civil district where it is located

• Loan Amount: The original loan amount, also called the “maximum principal indebtedness for Tennessee recording tax purposes”

• Maturity Date: The date on which the loan is expected to be fully paid off

• Document Details: The date the instrument was executed, the recording date, and a unique book and page number or document number for recordkeeping

• Terms and Conditions: Outlines the terms and conditions of the loan, including the rights of the lender in case of non-payment

• Signatures and Notarization: The original document requires the signature of the borrower/grantor and proper notarization with the notary’s seal and expiration date

• Assignment/Transfer History: Track the history of the mortgage’s assignment or transfer from one lender to another

Note that the Mortgage Electronic Registration System (MERS) is used by many lenders to streamline the tracking of mortgage servicing rights and ownership transfers in Tennessee. Hence, if a loan is registered with the MERS System, MERS is named as the original mortgagee or beneficiary (as nominee for the lender and its successors and assigns) in the publicly recorded document.

How Mortgage Records Affect a Property in Tennessee

A property can be impacted by mortgage records in several ways, one of which is in the establishment of lien priority. Lien priority refers to the order in which documents are recorded. This order is typically used to determine who gets paid first during a sale or foreclosure.

The guiding principle for lien priority in Tennessee is “first in time, first in right.” This means that the first recorded lien will be paid first in a case of a foreclosure. Note that there are a few exceptions, as certain liens can take precedence over a previously recorded mortgage. Examples include property tax liens, purchase money mortgages, and mechanic liens in some instances.

Besides establishing lien priority, mortgage records can also have other impacts. An unreleased mortgage from a previous owner can “cloud” a title, potentially stopping a sale or blocking refinancing until a formal release is filed.

How to Find Mortgage & Loan Documents in Tennessee

Mortgage liens and related documents in Tennessee are recorded and maintained at the county level. Therefore, you can visit the office of the county register of deeds where a property is located to find the mortgage or loan document associated with the property.

Additionally, many Tennessee counties have online searchable public records portals on the register of deeds or county website. Users can search by owner name, property address, or parcel ID.

Copies of mortgage records can be viewed online for free, or certified copies can be obtained for a small fee online, in person, or by mail (in some cases).

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