Even with the same income, the DTI limit you can afford varies depending on the type of loan you use. According to Qualified Mortgage standards, a backend DTI of 43% or lower is recommended, but actual general loans can range from 36% to 45% depending on the bank. If you're looking for a home in Plano, the first step is to calculate how much this range narrows your budget.

As of May 2026, the median sale price in Plano is around $540,000. Within Plano, there is a significant price difference between the densely populated western school district and the eastern area; the western area, where many Korean families reside, tends to be higher than this median, while the eastern area is generally lower.

Based on a $540,000 price point, if we look at down payment scenarios, an FHA loan at 3.5% requires $18,900, while a credit score below 580 requires 10%, which is $54,000. Applying the minimum 3% for a conventional loan reduces it to $16,200, but this increases the loan principal, adding pressure to monthly payments and DTI.

When comparing a 5% down payment of $27,000 and a 20% down payment of $108,000 side by side, both show that increasing the down payment reduces the loan principal, which is beneficial for DTI calculations. However, if filling the 20% down payment delays your move-in date, you should also consider that interest rates or prices may change in the meantime.

If you fill the 20% down payment of $108,000 and apply a 6.6% interest rate, the principal and interest will be calculated at around $2,760 per month. If you're targeting the western school district, it would be realistic to base your calculations on a higher payment, while for the eastern area, a lower payment would be more appropriate.

If your down payment is insufficient, it may be worth comparing two types of assistance programs. One is the First-Time Homebuyers Assistance Program in the city of Plano, which offers deferred loans ranging from $10,000 to $55,000 based on income requirements. The other is the HOME fund from Collin County, which provides up to $14,999, with conditions of a credit score of 620 or higher and completion of homebuyer education.

Both programs are advantageous as they reduce your out-of-pocket expenses and create more DTI flexibility, but they can also be disadvantageous as funds may run out on a first-come, first-served basis. Families moving from out of state need to factor in property taxes as well. Texas has no state income tax, but the average effective property tax rate is around 1.6%, so if your previous state had lower property taxes, the monthly escrow burden may feel significantly higher than expected.

There are also two main ways to increase your approval rate. One is managing your credit score; as of July 2026, a score above 780 has an interest rate of 6.59%, while scores in the 760s are at 6.66%, 740s at 6.75%, and 700s at 6.91%. The other is managing your DTI by reducing credit card debt and auto loans to lower the ratio.

Additionally, getting pre-approved, providing stable income verification through pay stubs and tax returns, and avoiding new loans or job changes before closing can further stabilize your approval chances. It's also wise to have reserves covering a few months' worth of payments.

If you have self-employment income, it's worth noting that many lenders assess based on an average of two years of tax returns. You might also consider adding a spouse as a co-applicant to lower DTI with combined income, and starting with a down payment below 20% and applying for PMI cancellation once the loan balance goes below 80%. After closing, remember to keep reserves for two to three months' worth of payments, and avoid new loans or job changes before closing. These principles apply equally whether you choose the eastern or western areas.

This article is not investment or legal advice, and assistance programs and tax rates may vary by county, so consulting a professional before making any agreements is recommended.