Can I afford University Park/HPSID? (Dallas, Plano: spring break, apartment, credit)

[TennStud]

Hmmm...Alot of difference of opinion here on price range but certainly do appreciate both your and TurtleCreek's input. Are the home prices in HPISD rising quickly...or can I wait a 9 months to a year. Anybody know at what % prices are increasing?? (or decreasing if I'm lucky)

[TurtleCreek80]

Originally Posted by TennStud

Hmmm...Alot of difference of opinion here on price range but certainly do appreciate both your and TurtleCreek's input. Are the home prices in HPISD rising quickly...or can I wait a 9 months to a year. Anybody know at what % prices are increasing?? (or decreasing if I'm lucky)

They are actually down about 2% from last year. But the number of sales is up significantly, showing that realistically-priced homes are being snapped up.

[TennStud]

Originally Posted by lh_newbie

Debt-to-income ratios for banks are done with pre-tax income, not take-home. So you'd need to pump up your calc from 10,800 to 20,000. By the way, how did you come up with a person making 20,833/month pretax would only have $10,800 take home?

Regardless of the calculation, I would personally not recommend going up to that limit from the banks - you'll be working and spending everything you have just to make ends meet. With $200K down and $250K income, I'd personally spend a max of $500-550K, so while I don't agree with the math of TC80, I agree with the outcome.

Brian

You are probably right.. but I'll be working and barely making ends meet as well if I send 3 kids to private school. We are in our late 30's and hopefully not at our peak incomes ...(plus I had a vasectomy)

[Big G]

Originally Posted by TennStud

...I had a vasectomy...

You might want to rethink your user name, in that case. Just sayin'.

[jelf]

25% of net pay is really conservative. I think It is more like 25 to 30 percent of gross pay (or even a little more) for some lenders.

If you figured 25% of net pay when I refinanced about a year ago,that would have come out to $1250 a month. My mortgage including taxes and insurance is just over $1900 a month (almost 40% of net pay including taxes and insurance). I am married now, but this was before I was married and had the dual income to calculate.

My guess is they would qualify for about a million or so with the 250k down payment.

Originally Posted by TurtleCreek80

Sorry, my bad. I read the OP as $200k income & $200k down. $200k income with 35% taxes/ maxed out 401k/ health insurance deductions nets down to $10,800/mo.

I arrived at a $325k mortgage based on the rule of thumb that PITI is 25% of net pay. Mortgage companies actually look at your front-end (gross) as well as back-end (net) incomes to determine loan qualificiation.

OP could probably go up to low $600k's safely. Which gets a little bit better housing inventory in HPISD, but not much. You need to get up to $800-900k to really start finding "liveable" family homes with decent floor plans and 3-4 bedrooms.

[racehorse]

You might also consider some other very good school districts, if you want to get more for your money. Plano ISD is very well regarded in these parts.

[Squirl]

Originally Posted by jelf

25% of net pay is really conservative. I think It is more like 25 to 30 percent of gross pay (or even a little more) for some lenders.

If you figured 25% of net pay when I refinanced about a year ago,that would have come out to $1250 a month. My mortgage including taxes and insurance is just over $1900 a month (almost 40% of net pay including taxes and insurance). I am married now, but this was before I was married and had the dual income to calculate.

My guess is they would qualify for about a million or so with the 250k down payment.

This discussion has moved from "What can I afford" -- which was the OP's first question to "What should I spend." I agree he will likely qualify for up to $1M and certainly can spend (depending on what other obligations he has) $700K to $800K as I have said 3x now. I know I am right, having done about 30 deals in the past and sold properties and helped my buyers go thru the loan process. But, again, the discussion has changed.......

[TennStud]

Originally Posted by Big G

You might want to rethink your user name, in that case. Just sayin'.

Yep, 'fraid my username is no longer relevant.

[TennStud]

Originally Posted by Squirl

This discussion has moved from "What can I afford" -- which was the OP's first question to "What should I spend." I agree he will likely qualify for up to $1M and certainly can spend (depending on what other obligations he has) $700K to $800K as I have said 3x now. I know I am right, having done about 30 deals in the past and sold properties and helped my buyers go thru the loan process. But, again, the discussion has changed.......

Hope your right Squril...I'll report back after I get prequalified. Thanks for your help

[malikguy]

Originally Posted by TennStud

I've been transferred to Dallas and will soon be looking for a home. We have 3 children and have decided that the Highland Park School District might make more sense than paying for private tuition for 3 children. Just not sure we can afford the home prices. Our income is around 250K per year and we have around 200K as down payment. We haven't bought a house in about 15 years so can't remember all of the qualification requirements. Also does anyone have any creative tricks to finding homes in the HPSID school district before they hit the market or are listed??

TennStud,

I wanted to post because I really feel that you have received some misleading information regarding how much of a mortgage you can afford.

There are many "rules of thumb" out there, plus many other more credible methods. In all of the scenarios that I am going to go over with you, I will assume that you have relatively little to no debt. Additionally, I am assuming $200k down with a 2.5% local property tax and a very high interest rate of 7%.

Scenario 1:
General rule of thumb is that you can afford 3 times your annual gross income.

$250,000 salary x 3 = $750k mortgage

Scenario 2:
General rule of thumb is that you can conservatively afford 28% of your montly gross income.

$250,000 salary / 12 = $20,833.33 * 28% = $5,833.33 monthly mortgage payment

This translates roughly to a $800k to $850k home with $200k down.

Scenario 3:
General rule of thumb is that you can aggressively afford 45% of your montly gross income.

$250,000 salary / 12 = $20,833.33 * 45% = $9,375.00 monthly mortgage payment

This translates roughly to a $1.2M to $1.3M home with $200k down.

In scenarios 2 and 3, it really depends on your means of living. The cost of living in Texas is comparably very cheap vs. many other states. You will need to factor in your style of life (cars, eating, shopping, children, etc). You also need to factor in other costs such as retirement, health/life insurance, etc. With that being said, I am sure you have excellent credit and that any bank would be more than happy to loan you even more than the scenarios listed above; however, the higher you go, the more risk you take. You never want to over extend yourself.

If you are willing to make the drive, Frisco (great schools) or the Las Colinas (not so great schools) area have some very large and beautiful homes. You will definately get a bigger bang for the buck. If city life is a must, then the Univ. Park area is the way to go.

I hope this helps! Feel free to PM me or respond to this post if you have any questions and welcome to Dallas!

Thanks,
Malik