Am i ever going to buy house in DFW? (Dallas: new home, safe neighborhood)

[frisco19542]

Originally Posted by lukas1973

Are these figures for a 30y mortgage? The monthly payments seem extremely high to me. A family of three with an annual gross income of 70k should be able to to buy a 400k house with ease. The monthly payment would be less than 1,300 by opting for a 30y mortgage.
With an annual gross income of 100k you should be able to stem a monthly payment of 3,500, enough to buy a 1,000,000 mansion.

A good rule of thumb is max house is about 4 times income. You can afford more if you have a down payment but of course things like maintenance and taxes have to be considered.

I have seen people who do well who stretch that a bit if you buying a house and do a 5 year fixed arm. There plan is the do not do any major maintenance and sell every 5 -7 years. It is actually a pretty sold plan and they save on closing costs doing that. With rising interest rates pretty soon fixing for 30 years doesn't make as much sense.

[ThomasCrown]

Our home has gone up around $250k in the last 4 years. I'm not sure I would pay that kind of money for this house, but homes in my area that are comparable are bringing in top dollar.

As it is now, we're approaching a valuation of almost $1 million. We'll probably live here for another 4-5 years and then I think we'll consider downsizing to a home with about half the value once the kid starts college and get rid of our house payment altogether with all the equity we've accumulated.

[lukas1973]

Originally Posted by Stevehanrahan41

70k income for a 400k house!? 5.5 times their income? If you were in charge of lending we'd be in another housing crash within a year!

I really really really need to consider switching to your bank! A 400k mortgage for less than $1300 a month!? Are u insane!? Lol

Maybe I should have mention that my example was for Germany

70k Euro gross income means a monthly net income of about €4,000 in Germany.

A €400k mortgage with a €50k down payment with a fixed interest rate for 30 years would lead to a monthly payment of €1,242.50. That's maybe 50% more than what the family would pay in rent for a decent apartment. Remain roughly €2,750 per month. That is pretty decent for a family of three in Germany. The family would be still able to safe quite a lot every month.

APR is 2.3%. Interest rates are a lot lower in Germany.

I brought this example because many Americans think that buying a house in Europe is so unaffordable. But considering that most people have to finance the purchase of a house by a mortgage it gets quite affordable, at least in Germany. But note that an annual gross income of 70k Euro is already quite high for Germany. Reading in this forum, I'm always astonished how much money Americans make and how much money they need to finance a house (because of higher interest rates and property taxes).

https://www.drklein.de/bauzinsen-rechner.html

[lukas1973]

Originally Posted by TurtleCreek80

Wha??? I think you're only considering the mortgage itself, and not the property taxes and insurance components of PITI.

A $1M mortgage alone will run about $5k per month, plus somewhere around $20k per year in property taxes and $3-4K/yr insurance premiums. So that $1M house costs about double the $3500 you quoted. Not sure how you think someone GROSSING $8300/mo would be able to afford a $7k PITI each month.

Actually, I don't even know how someone grossing $8300/mo could safely afford a $3500/mo PITI ($500k range home) considering just the PITI would be well over 50% of their net pay, not even including monthly bills for the home or any other living or savings expenses.

The rule of thumb is to keep PITI to about 25% of net income, with all monthly housing expenses at about 33%. In that case, a $100k income means a house in the $275-300k range is affordable. A $70k income should not purchase a home beyond the $175k range.

Maybe I should have mention that my example was for Germany

The monthly payment for a €1m mortgage with 10% down payment would be around €3,500. On average the insurance for residential buildings in Germany is roughly €200 per year. It's maybe about €1,000 for a €1m mansion. The property tax for such a house here in Düsseldorf would be around €2,000 per year.
I'm aware that it's not comparable to the situation in the U.S.
I'm always staggered about the costs to finance a house and the additional costs in the U.S. But also about the high incomes that many Americans make.

[Threestep2]

Originally Posted by lukas1973

Maybe I should have mention that my example was for Germany

70k Euro gross income means a monthly net income of about €4,000 in Germany.

A €400k mortgage with a €50k down payment with a fixed interest rate for 30 years would lead to a monthly payment of €1,242.50. That's maybe 50% more than what the family would pay in rent for a decent apartment. Remain roughly €2,750 per month. That is pretty decent for a family of three in Germany. The family would be still able to safe quite a lot every month.

APR is 2.3%. Interest rates are a lot lower in Germany.

I brought this example because many Americans think that buying a house in Europe is so unaffordable. But considering that most people have to finance the purchase of a house by a mortgage it gets quite affordable, at least in Germany. But note that an annual gross income of 70k Euro is already quite high for Germany. Reading in this forum, I'm always astonished how much money Americans make and how much money they need to finance a house (because of higher interest rates and property taxes).

https://www.drklein.de/bauzinsen-rechner.html

Dallas is in Texas. At least for now. OP does not have 50k down payment, OP does not have a family of three. Your number do not reflect US rates, taxes, additional charges.

US real estate prices as well as German ones depend on a number of factors. Location, location, location, size, quality, ammenties. Downtown Munich, 1/2 acre, gated community, top school district, custom built versus Reihenhaus with car port out somewhere and a school district with no draw

[Threestep2]

Originally Posted by lukas1973

Maybe I should have mention that my example was for Germany

The monthly payment for a €1m mortgage with 10% down payment would be around €3,500. On average the insurance for residential buildings in Germany is roughly €200 per year. It's maybe about €1,000 for a €1m mansion. The property tax for such a house here in Düsseldorf would be around €2,000 per year.
I'm aware that it's not comparable to the situation in the U.S.
I'm always staggered about the costs to finance a house and the additional costs in the U.S. But also about the high incomes that many Americans make.

Maybe in your circle 70k is a high income range. Talk to expats and you will be surprised.

Even for Germany your insurance amounts are not realistic.

In other threads you elaborated about low rents and showed realtor sites. Again - it depends on location and personal choices. A house without double or triple garage in DFW? Washer/dryer in a bathroom? Walk up? Kitchen with new but outdated appliances and apartment fridges? Limited personal outdoor space? 80 sqm residences? Kitchen table home offices? ..... You can have cheap housing in the US - if that is what you want. OP wants new construction in a high demand area with good schools. You pay for what you get.

[Dallas retail updater]

Originally Posted by Zync33

Hello,

I am Married and have two preschool kids. My family income is 115K. I dont have any debts. I have bank balance of 40K. I dont have any other savings. I currently live in West Plano. Our work locations are near by.

I am interested in buying house in safe neighborhood with best schools around in DFW (Plano/Frisco/McKinney/Prosper/Allen). I feel that, i can afford around 350K house with 25k downpayment.

Based on my research on internet, i feel i cannot buy a new house with better schools around.

I currently stay in apartment. What do you guys think? Am i ever going to afford a house in DFW? I thought 115K is above avg income. But it seems i am wrong. I am losing hope.

As long as the developers of new homes are the same guys building new apartments, buying a new home will never be a good investment. Indeed, aren't these guys keeping both the occupancies of their apartments high and the price of new homes high by dragging their feet on building new homes?

And too many people today are making the same huge mistake of investing their money in savings. While they are always advertising saying that it is smart to save, it is never a smart thing for the saver. It is only great for them, for those fortunate ones waiting in the shorter lines at the bank, and for computer hackers that steal your money, as well as for other bank robbers and psychopaths.

I've given this matter a lot of careful thought. Forget about buying a new home and renting an apartment. Instead take the $40,000 out from the bank and invest it in manufacturing. Indeed, manufactured homes are being built better today than new homes. In this way, you can be your own landlord. If a time comes that you no longer get along with yourself, you can put wheels on your home in order to move it.

[Dallas retail updater]

Originally Posted by Threestep

Maybe in your circle 70k is a high income range. Talk to expats and you will be surprised.

Even for Germany your insurance amounts are not realistic.

In other threads you elaborated about low rents and showed realtor sites. Again - it depends on location and personal choices. A house without double or triple garage in DFW? Washer/dryer in a bathroom? Walk up? Kitchen with new but outdated appliances and apartment fridges? Limited personal outdoor space? 80 sqm residences? Kitchen table home offices? ..... You can have cheap housing in the US - if that is what you want. OP wants new construction in a high demand area with good schools. You pay for what you get.

During the last boom, one could just move to Fort Worth. Indeed, that is a large part of the problem today allowing developers to put the squeeze on. The Fort Worth economy is hurting this time around. If you don't have more money than sense, it is better to buy a home in Fort Worth.

[EDS_]

Originally Posted by Threestep

Maybe in your circle 70k is a high income range. Talk to expats and you will be surprised.

Even for Germany your insurance amounts are not realistic.

In other threads you elaborated about low rents and showed realtor sites. Again - it depends on location and personal choices. A house without double or triple garage in DFW? Washer/dryer in a bathroom? Walk up? Kitchen with new but outdated appliances and apartment fridges? Limited personal outdoor space? 80 sqm residences? Kitchen table home offices? ..... You can have cheap housing in the US - if that is what you want. OP wants new construction in a high demand area with good schools. You pay for what you get.

Don't know about the other stuff but lukas1973's point about incomes is broadly correct......real incomes in Germany and across Europe with only minor exceptions are much lower than in The US.

[Threestep2]

Originally Posted by EDS_

Don't know about the other stuff but lukas1973's point about incomes is broadly correct......real incomes in Germany and across Europe with only minor exceptions are much lower than in The US.

Again - it depends on location, industry and position. You can look at statistics all day long and it is nothing but numbers. Just read up on how median incomes are being computed by US Dept. of Labor.