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CATHERINE REAGOR REAL ESTATE
CK TO KS IN TH
Verrado, Vistancia turn 10
T How much house can you
AFFORD? Dolores Tropiano
Special for The Republic
Ready to buy a house? Before you spend a day drooling over homes you may not be able to afford, the first step is to determine your budget, which means it’s time to calculate your debt-to-income ratio. DTI is used by loan officers to determine how much a person is qualified to borrow. The calculation itself is the percentage of a person’s monthly gross income that goes toward paying debts. Lenders analyze DTI because it gives them an indication of a buyer’s full financial picture and ability to pay his or her debts. As a general guideline, lenders typically want a buyer to have a total debt obligation that’s less than
36 percent of gross income. “Before you even start looking for a house, getting a Realtor or going on Zillow, the first step is to know your debt-to-income ratio,” said Jeremy Schachter, branch manager and mortgage adviser for Pinnacle Capital Mortgage Corp. “It’s one of the most important things that lenders look at besides your credit score.”
Calculating DTI
There are two types of DTI: front-end and backend. The front-end ratio looks at housing debt, and the back-end or overall DTI looks at your overall recurring monthly debts. Here’s how to calculate them: To calculate your front-end DTI, simply take your
See AFFORD, Page R3
wo of metro Phoenix’s most popular and biggest new-home communities opened a decade ago in the West Valley: Vistancia in Peoria and Verrado in Buckeye. Vistancia and Verrado made LA-based real-estate analyst John Burns’ national list of the 50 top-selling masterplanned communities in 2013. Vistancia ranked No. 31, higher than any other Arizona community. Verrado ranked No. 41. Both saw their home sales surge during the boom and then plummet during the crash as foreclosures climbed. Now, both are on the upswing. A bridge over the canal linking Vistancia North to the rest of the 7,100-acre community opened last year. Plans for the community’s second phase call for as many as 3,500 houses, a 900-acre reserve and a 500acre commercial center with offices and retail. Mark Hammons, general manager of Vistancia, said the community is working with the Greater Phoenix Economic Council and the Arizona Commerce Authority, as well as city of Peoria, to attract potential national users to the commercial property. Since 2004, almost 4,700 new houses have been sold in Vistancia, where 12,400 residents now live. A couple of fun facts: More than 80 weddings have been held in the community since 2009, and more than 85,800 rounds of golf have been played there since 2007. Scottsdale-based DMB Associates is launching an age-restricted community in its 8,800-acre Verrado next year. Called Victory, it’s going up on 1,200 acres and is planned to help redefine retirement for Baby Boomers. In the non-retirement area, the final phase of the Heritage District at Verrado recently launched. Seven homebuilders paid a total of $45 million for 150 acres, where 640 houses are planned. See REAGOR, Page R3
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AR-0008205440-01