21 Apr 2018

Want to know the Texas Housing Affordability Index?

The Frisco tx real estate is seeing a huge changeover in the recent years and you all must know what THAI or Texas Housing Affordability Index is before venturing into the market. It is the index that reflects the relationship between the median family income in a locale and the computed amount required to purchase a median-priced home. The required income is derived from the current mortgage interest rates, down payments, lenders mortgage to debt to income ratio etc. The qualifying ratio is a measure of the monthly mortgage payments to the borrower’s gross monthly income. Like for example, a qualifying ratio of 25 percent will be meaning that the monthly mortgage payment which can be the principal and interest cannot exceed 25 % of the borrower’s gross monthly income. Having a higher THAI will mean that you have a relatively higher affordability.

 

When you look at THAI which is the Texas housing affordability index used for measuring the ability of the household earning income you will be shocked to see a few facts. The index at which the ratio of the median family income to the required income to qualify for a home purchase was directly proportional to the mortgage loan at the current interest rates. When you want to book a homes for sale in Frisco, TX you need to keep in the mind the THAI too. The ration of 1.00 will mean that the median income family income must be more or less like the required income to get a median price home in the Area. Affordability will only increase when the qualifying income will increase more relative to the median family income.

 

The index is calculated for homebuyers as well as first time home buyers FTHAI too and both the indexes are said to be computed on a quarterly as well as annual basis. The standard calculation that is used for the THAI is that it takes a down payment of 20% and the qualifying ration is said to be at 25%. The down payment and the qualifying ratio for the frisco homes for sale will be varying among the borrowers depending upon the financial status of the borrower and the lenders assumed a level of risk. The users will be allowed to select from the several down payments and the qualifying ration options to compute the alternatives. The users may be forced to select a down payment of the qualifying ration option of 3.5 to 5 to 10 to 20 percent with either 25,30,35 rations to estimate the HAI.

 

Having a lower down payment will increase the required qualifying income as well as reducing the affordability. A higher qualifying ration will be decreasing the required qualifying income and to increase the affordability. You must also know that the quarterly THAI data will be released one month after each respective quarter and the Annual THAI data will be released in February each year. The THAI is calculated for each state as per each MSA and metropolitan division and selected counties too.

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