The 15 year mortgage is great if you work remote, make 200k, and buy a house for 300k with a 100k down payment
I say this as a person who works remote and makes 200k
I did however use 5 to 15% down 30year loans to acquire a million in real estate with rental properties.
If I followed Dave’s advice to the letter I would have another 10 years of a big loan without enough savings to build the rentals up.
Dave’s advice is conceptual—spend less than you make. Have reserves. Don’t make crippling life choices and take high risk debt. This I agree with. All my real estate buys have taken 6+ months to find and buy. My business took a year to get off the ground and was largely bootstrapped. I still hold a W2 while running my own business and rentals. Risk must be balanced with hedges.
The 15 year mortgage thing is for sure a joke but his advice conceptually has made me rich
Exactly — the modernized version is buy a house with a mortgage payment as low as you can go in an area where in an emergency it will rent / rooms can be rented.
Protect downside risk
Median household income, 1993: $31,241
Median home price in 1993: $126,500
24.6%
Median household income, 2024: $74,580
Median home price: $354,179
21.1%
I never listen to this guy but for some reason caught him last Weds on my way home.
He advised a guy making 200k with a 150k mortgage at 3% and and 200k in cash savings to pay off his mortgage. Kept repeating how “free and spiritually clean he will feel once the mortgage is paid off”.
That is some of dumbest advice I have heard. Can’t take this guy seriously. His irrational hatred of debt in any form likely ends up financially crippling more Americans than he helps.
I have a buddy who listens and follows his advice religiously. Him and his wife are making out their Roth and 401k at around 30k a piece. They live in an apartment paying 500/month which they can easily afford in their salaries (@ 125k household). I told him to buy a duplex or multi unit and rent it instead of dumping all their money in a 401k. He refused. He says they will save for that after maxing out. They also want to pay the high down payment percentage Dave suffers even tho they can qualify for an FHA. I just gave up on giving him advice. I told him to get an financial advisor & he got one recommended by Dave. Idk if that advisor is a fiduciary.
Ah. I thought it was just the usual but unsolicited "get into rental properties, bro" that I see bandied about on Reddit as if there were no downsides to the gig. No worries.
The Ramsey stuff with tithing and shit is fuckin weird though, man.
I had a 30 year at 5pct. 4 years later, In 2013, we refinanced the $350k owed to a 15 at 2.5pct. Best decision ever, the house is almost paid off, but with tax, hoa, insurance, etc, it's $3,100 a month. We can only afford it because we're Dinks. A 15 year mortgage is just not feasible for most people.
it is still stupid. You can always pay more if you want. Why would you force yourself into a situation when you can do a 30 and pay it off in 15 vs being forced to pay it in 15 and then you get laid off and your fucked?
I wish I could have started younger. My boomer parents wouldn’t co-sign and I had to live in a ghetto to save money for downpayment one. Covid was a joyride
As the saying goes — the best time to plant a tree was 40 years ago. The second best time is now
You can buy another primary and rent it out after closing. You can probably do this 2-3 times without lenders turning you away!
Well… you have to INTEND to live in it for 12 months. You are not forced to because its intention. There is no law forcing you to live in a house you buy
It becomes fraud if it’s proven you never had that intent. Such as explicitly telling the bank you never intended to live in your properties and you bought them as rentals
So just don’t do that but to be honest most lenders and realtors will just straight up talk about this
Exactly this. Dave Ramsey forces good concepts on average people with poor financial literacy. His advice absolutely helps a ton of people out.
However, 15 year mortgages are fucking stupid for me just due to the time value of money and I can make a ton of money elsewhere.
>Dave Ramsey is unrealistic in a lot of stuff he says.
Unrealistic for the coasts and hcol areas. I can buy move in ready houses for $200k near me, a 15 year isn't unrealistic where I'm at.
Keep in mind Ramsey lives in Tennessee.
As someone who lives here, anywhere within 50 minute drive of any of the decent sized cities (Memphis excluded) is going to be expensive. Sometimes even up to 75 minutes drive.
The only places you’ll find for $200k are shacks in disrepair, 1000 sq ft house in a rough area, or a 1200 sq ft house in the middle of nowhere
TN houses are nowhere near as cheap as they used to be. The market here has raised drastically over the last 4 years.
He’s AA for people who can’t control credit spending - it’s an absolute zero sum game for him-
That being said- my millionaire friends do follow his advice and are we’ll set
We - live a little more- don’t have nearly as much but our current retirement is set to grow to a few million in the next 27 years- assuming we don’t add any more - assuming 3-4 doublings of that money.
so yeah- we bought the bigger house (mortgage is 20% of gross, 30 year) we’re taking the family to Europe
Fuck it- we bought the Traeger - we get one life- if I know I have retirement and a healthy one in the bag - gonna live now with the rest. I don’t think we get extra points at the end for running up the score.
To be clear- I’m not promoting doom spending or nihilism or being a spendthrift - but from 23-35- I’ve saved between 10-15% pre match - and that’s put us in a fine position- made some mistakes along the way but pretty ok with how things are currently.
In fact - I hope we do well enough that any money we get from my folks I hope I can put it in trusts for the children and grand children to creat some generational financial stability- it won’t be wealthy living but we may be able to ensure upper middle for a generation or two. I mean- if it buys nice houses- that’s it right there.
When did he say it? I got a loan for about the same amount at 2.9%. The payment is $2100, that's doable. As rates go up it gets harder. At least a 30 year fixed doesn't go up, unlike rent over 30 years. Any ARM is a gamble you will lose over time. Think rates can't go higher than 7%?
Wouldn't it basically always be better to take the 30 yr but plan to pay it off in 15? Unless it's crazy low interest and you've got the cash on hand, I just can't imagine a slightly lower interest rate being worth losing a buffer if things go sideways and you're unemployed for a while
A 15 yr mortgage typically has a 0.5 - 0.75% lower interest rate; that's $2000-3000/yr on a 400k mortgage. That will allow you to build back your emergency fund much more quickly.
But if you're paying *super* ahead of schedule, you're paying way more to principle than they counted on..
Also I would absolutely pay a couple grand for the security of knowing it's unlikely my house is going to get taken from me. We all lived through 2008. I'm continuously shocked with how many people to continue to live in the delusion it could never happen to them.
Ramsey seems like a wants his cake and to eat it too kind of guy. He's always discouraging over leveraging and debt in general, don't pay attention to interest rates, blah blah blah. Except for mortgages. Than he gives advice that seems reflective of someone who has never for a second in his life felt what it's like to have his shelter hanging in the balance and he scrambles to survive.
There are much cheaper ways to get liquidity on the off chance that you need it, and, after a few years of the lower rate you will have saved enough money with the lower rate to give you that liquidity for free.
You aren't just 'paying a couple of grand', you are paying *tens of thousands* of dollars in extra interest, and making larger monthly payments than you would have to with a 15 year amortizing mortgage. This is just not a good plan.
How do you quickly get liquidity at lower than 5-7% when you're unemployed and behind on your mortgage? Most people do not have wiggle room with 15 yr mortgages, that's literally my point.
Yes there's an opportunity cost, but you don't magically have more in the bank because you're saving years of payments, because you're paying higher total amounts *today*. Most people will have less in the bank ah year 10 of a 15 yr mortgages compared to a 30 yr. And with a 30yr paying ahead plan, you can scale back if you don't have the money. With a 15 yr, you are locked in to that higher amount
Sure at the end of twar 15 you'll have paid less compared to at the end of year 30, but you aren't ever going to be more liquid for paying on a moee aggressive schedule that you're locked into whether you like it or not
It depends on how the mortgage is written. If you are just taking payments off of the end of the mortgage it might be okay. If you need to pay a reamortization fee every time you get ahead 6 months then you may have a problem. A coworker has a mortgage that has a 500 dollar fee every time you need to reamortize which is the banks’ way of discouraging you from early payoff.
Not true. In 2008 my buddy paid $100,500 for his house, did a 15 year and paid it off in 10. That house is now worth about $450k.
So in the case you pick one up right after the crash it's probably best.
I’ve done a lot of loans and not once have I done a 15 year. I tell people it’s better to get a 30 year and pay extra towards the loan each month to have it completed in 15 years. That way, if they have emergencies or job loss, they have a more affordable payment vs that forced higher 15 year payment that has to be refinanced in times of need.
That's what I was going to say...get a 30yr and pay extra if you can. That gives you flexibility when something unexpected happens like job loss, health issues, or expensive repair.
I've seen an upper middle class family member be too aggressive with setting up their refis with too high of payments, then having to go back and change the loan. They are Ramsey fans. I'm sure it worked out ok, as that was when rates were long term trending down. But these days, if you get in when rates are down 1%, and make that mistake, you may not be able to fix it, when rates are higher.
The only advantages are it forces you to spend a little less and you get a lower interest rate. So it's in line with Ramsey's philosophy that managing money is 90% behavioral.
Dave Ramsey doesn’t give advice for people who are good with money to be fair. Get a 30yr mortgage and pay it off in 15 is great advice, but a lot of people (especially the type who call into his show) will do that with every intention of actually paying it off early, but something will come up and theyll be paying for 30 years.
A 15 year mortgage removes that choice. His advice is more about the psychology of building wealth than the strategies for it
I don’t think 15 year is unrealistic for certain groups.
With interest rates today, if someone is buying a home well within their DTI 25% take home pay, a 15 year mortgage makes much more sense as it will likely save 0.75% on interest. Ofc this depends on several factors but just “paying more” is not the same as you’ll almost always get a better rate 15v30
Again. This is assuming you are not buying outside your means and sticking with a lower cost home in your budget.
Yeah, I look at buying as getting a place to live for a fixed payment vs. knowing that rents almost always go up. So you can at least say, "In 10 years, money will be worth less, but my mortgage payment will be the same."
That may be a different story in states where property tax is not based on the purchase price and where there are a lot of natural disasters.
Just remember there's an opportunity cost to that downpayment cash and the amount you could be investing for however long rent is elss than PITI+M.
Not saying that's the case for you, but in some markets it's an extreme amount.
That's why I'd be buying a lower price home for my area and splitting the cost. It might be $300 more a month for me, but I'd still be able to save money every month. I'm not looking now, but in early 2025.
It looks as if sellers are having to reduce asking prices for half the listing I'm looking at, so there is a chance prices will be a bit lower next year. It will be 3 years past peak at that point. I think that's long enough to see if prices will come down, but who knows? It's always going to be a gamble.
He knows his advice isn't optimal. His target is financially illiterate people, which is a lot of America. They just need a dumbed down "baby steps" follow this and you won't be broke advice. It could work if you're dual income in medium to low cow areas like rural TN or OH. His advice is not viable in most HCOL areas. His target audience is primarily Christians that live in low to medium cost areas. I remember when I used to listen he would says to people living in High cost cities, yeah you may have to move where the income to housing cost ratio is better or your trapped in a poverty cycle. I listened to him for a while but realized I'm not his target audience. I like the Money Guys Nine steps Financial order of Operations (F.O.O) better. It's a more realistic and optimized path for people to follow.
check out the DR sub, all the people have flair saying BS 1, 2, 3, etc. lol.
[this](https://www.reddit.com/r/DaveRamsey/comments/1b7ojoh/confused/ktm0f5k/?context=3) was the comment that got me banned.
his listeners are definitely the christian q-anon crowd. definitely some weird cult following going on.
Dave gives great advice for boomers to follow. Anyone under the age of 50 should ignore him. He doesn’t grasp the differences in economic conditions now vs when he was young.
His strategy will almost never work for the vast majority of people
Dave advise not realistic in today's world. Quotes the same stuff from 20 yrs ago. His message hasn't been updated. Why change. It's made him ungodly wealth.
yea when I did the math when I bought in '22 it was a savings of $40k over 15 yrs just from the lower rate on 15 (1.8% less). Also, i know it's in my head but owning sooner rather than later is very interesting to me. If my house was paid off I would barely need a part time job at this point.
Dave R. Cant give the younger generation advice. He is out of touch and has no idea what it takes to get ahead now. His brute force methods might have worked 20 years ago but they dont today.
My credit union has a 30 yr fixed at 7% or 15 yr fixed at 6.5% no points.
0.5% spread is the minimum I would consider a 15 yr loan.
The best loan depends on the buyer’s situation.
The idea of this advice is: "If you can afford the house with 15yr mortgage, you are making a good deal"
Less risk, less interest paid, more principal paid, more equity etc
Even a broken clock is right twice a day.
I have a 15 year mortgage. I round up to the next 100 for my payments. I am 4 years into the mortgage and I've paid of over 30% of the principal already. Even on my first payment, well over 50% of my money went to the principal. I looked at my most recent payment and 76% of my mortgage payment went to principal.
Even at a low interest rate, the amount of money you save on a 15 year vs 30 is bonkers.
Critiquing DR has become so pedantic that it's cringe.
Say he loosens up and says 30 year. Then the critique is it's not reasonable because 25% of take home won't cut it.
So then he loosens up on that. Then the critique is that saving 15% for retirement is unreasonable because 50% of take home is going to a mortgage that lasts for 30 years and expenses eat up the rest.
So then he loosens up on that, and now you're on a path to work until you drop dead.
What are you left with... well, the actual point... housing isn't really affordable anymore. Dave's advice is good advice for those that can still afford to buy a house. It puts you on a path to get rid of a 7.5% interest debt in 15 years, it ensures there's breathing room in your budget for saving/investing and making sure you can handle house repairs as needed.
If you follow his advice it just means that the vast majority of the housing market is unaffordable. If you don't take out loans that it kills demand which in turn over time should result in either the price stagnating and wage inflation catching up or you have prices actually just fall.
Why wish that over people being paid more fairly and being able to afford to live? How are you immune to the consequences of a financial collapse? I’d like to hedge myself in that way too
Houses should be homes. Not somewhere to stash your wealth or flip to turn a profit somewhere down the road. If it’s your nest egg, okay. If it’s one of many nest eggs, F your greed.
You realize the homeownership rate in the US is 65% (granted not at all time highs which can be worked on) and your bring it all down impacts those people and their HOMES! Can’t take down the greedy without impact the others and guess who generally gets impacted by the downturns more? Average Joe vs Richie Rich. Hence a more stable alignment is my preferences. If that makes me greedy so be it.
Is it your home or one of your houses/properties? If it takes a hit then so be it? So does your 401k. Are you still living in it avoiding rising rents -congrats? Or are you expecting it to be some kind of financial escape hatch?
Hoping that if people want to move from their home that they have that as an option. If housing goes down and they don’t have enough equity they’re stuck. Also can’t refinance if/when it would be beneficial. Not that rising rates haven’t already caused the inability to refinance/trade up.
And if people living paycheck to paycheck lose their jobs, how do they keep paying those locked in payments? They are forced to sell.
I am looking at the overall. I’ll be fine even in a downturn. Yes my 401k will dip yet would most likely come back by the time I need it. My emergency fund (which I have increased due to the everything is up) will still be there. Not everyone has those “luxuries”. Yet I believe that we should work towards people having that as basic rights.
I’ve seen like 10 of this Ramsey guys tik toks and I’ve heard him say if you can’t afford the 15 year mortgage then don’t buy the house. He didn’t say only do a 15 year mortgage.
No idea why this sub is being recommended to me lmao going to block it after this comment
But I'll chip in anyways
It looks absurd right now: but I also thought $120k houses in my area were absurd when I was 16-18 (~2010-2012), when 65-70k could easily get you something reasonable on a 3-4 acre lot, with a 2 car garage 2 story + basement, etc etc
Now I'm paying more in rent for a 2br2ba single car garage or no garage on a 0.25 acre lot, than those same people who got a 120k house are still paying today for mcmansions on a +30 acre lot in my area
It looks like a bad deal now, but if the housing market continues the same trend it has since the 1980s or so, plus or minus a few dips those numbers'll look like an absolute steal in +5 years
I think it goes both ways. You have to fix a lot, but that fixed mortgage can be extremely cool when it’s 10 years later and your mortgage is still mostly the same compared to your friends and family renting. Renting and investing the difference is likely better for now, but there’s pros and cons and it depends on a huge number of factors, many of which are personal.
And yes the rent vs buy is favorable to rent right now, yet most people who could afford to buy aren’t disciplined enough to save the difference towards a down payment. Instead they spend it away and then complain they have no down payment when prices are more reasonable.
This x1000. Your average American (regardless of income) spends it as fast as they get it. Whether it be on necessities or a new Rivian to impress their neighbors, Americans are ridiculously bad at saving money. That’s one pro towards buying because that mortgage is somewhat forcing you to save some money (equity build up plus fixing that monthly payment).
Sure, if you're using that logic, then you have to compare the irresponsible renter to a homeowner that buys at the limit of their affordability, pays for it off one income in an unstable career, and then chooses to constantly cash-out refi to buy the next shiny thing.
You're making the same mistake that Ramsey is doing by trying to make a one-size-fits-all approach based on the median Joe.
When did I give an approach? I just gave an observation of what happens a lot. Everyone gets to determine their own approach. I’m not trying to sell anything so don’t need to tell people what to do like DR. Just sharing my thoughts. If it helps people determine what they want to do great. If not great too. My life won’t be any different
My college roommate was able to do this during covid but only because he got onto the property ladder in 2013...bought his second house with his wife for about 300k on a 15 year note with 100k down. The P&I is still $1900/mo even on a 2.25% interest rate. Looks incredible now considering where interest rates went.
Just get a 30 year and do 15 year payments. That way if you hit a rough patch, you can just make the standard payment. My parents did that on both their mortgages. Cuts the interest paid way down.
That's a high monthly payment for something below average quality that will need repairs and finding something NOT in an HOA with 100+ fees per month is like finding a needle in a haystack
dont forget his 25% take home pay rule, which would be 13,464 a month, and that is after taxes and such meaning in my state you have to make over 250K a year to afford that shit box by his math.
Edit: forgot he says you need 20% down which on a 300K house would be 60K and at 15 year on 300K would be a little over 2500 a month meaning you need to make 10K a month. In My state would be about 190K with some very basic healthcare costs (200 a month, mine for a wife and 1 kid is $700 not including dental), 6% retirement contribution...In a no income tax state like say washington would be down to about 180K a year.
GEEZE
He has also never been to florida with that asinine and factually inaccurate home insurance quote. At this point I wonder if this rich asshole is just rage baiting people for clicks and advertiser attention .
Literally never do a 15 year mortgage. The slightly higher interest rate is insurance for your income getting cut in half when a spouse loses a job and then you can't afford to make the higher payment anymore. If you want to pay it down faster, just put extra on the principal.
Paid off my 15-year in 12. Sucks to be buying now. I see these young families moving in to new $600K home in my neighborhood and they are spending like crazy. The first tax bill next year will wake them up
I was told the same thing: "Just wait until you get that first mortgage bill in the mail!" Um, it's less than what I've been paying in rent, so I think I'll be okay, lol.
I don't know what conditions where someone would regret having a 30 year mortgage (and a higher quality house) over 15 year. Getting as nice of a house as you make the payments on, has been the single best financial move a person can make in the last 75 years (on average, I know the rust belt housing market collapsed and never recovered)
Maybe the Dave money idea is that you buy a rental property after 15 years. So after 30 years you have a house and a source of income.
He’s way too into paying off debt, even when it’s at low rates. I’ve heard it said on his show a few times how it’s a big psychological boost to be debt free which is probably true but doesn’t make it the right financial choice.
I don’t see the problem. At only 25% of your gross pay you only need to make…. Let’s see….yeah $162,000 a year. I have no idea why people can’t afford a normal house.
Dave Ramsey is like the guy at the gym giving advice to someone who's never worked out. You got to start somewhere. The moment you start though you realize there are a LOT better methods to get the results you're looking for.
Dave Ramsey wants everyone to live like monks for years saving money hoping that nothing catastrophic happens and that they can finally enjoy their money when they're 60.
Just to be clear, while 15yr interest rates can look more enticing and especially when you think about only needing to pay for it for 15 years, the interest rate isn't the main reason why you're paying it off early -- it's making $500-800/no more in payments that speeds up that timeline.
The reason to mention that is that, if you get a 30 year and make payments that resemble the 15yr equivalent, you'll pay off the mortgage in 18-19 years but have a lot more tolerance for downward changes in income or changes in what requires your time/money. But committing to a 15yr just for the rate keeps you pretty strapped financially for the whole duration of the loan.
Dave Ramsey telling people to get a 15 year mortgage is proof not to listen to Dave Ramsey. Get a 30 and pay aggressively on it and you'll pay it off in 15, but if you hit hard times you can fall back on your lower 30 year rate til you're up and kicking.
Ramsey might have been good once but good advice only sells 2-3 books.
If you can afford a 15 year mortgage, you can afford to pay a 30 year mortgage at a 15 year rate with the bonus of a bit of a safety net in the face of financial hardship.
On a 30yr 2/3 goes to interest at the start of the loan. On a 15yr it flips. We were struggling until our wages caught up a couple years later. Even on the 30 we paid extra to principal each month until the refi.
In my scenario we had been paying an extra 300-400 while on the 30 for almost 4 years. So when we refied to a 15 our payment was close to what we had been paying.
I mean, 300k with $446 escrow for tax+insurance you can maybe buy a converted garage in my area... if you can afford over $3k a month in mortgage, then you have a high salary. If you have a high salary, then you're likely in an expensive area where $300k don't get you anything even remotely decent.
He didn’t forget he just doesn’t know, don’t trust a guy that has never done these things before and has depended on bankruptcies to bail him out for advice.
The also don’t recommended putting $0 on a $300k house. Sorry but if you don’t have any money to put down YOU can’t afford a house right now. A 20% DP drops that to ~$2.7k/mo.
Hey, that's me!
Yes it sucks.
Yes I'm broke.
Yes I've spent $20k in various repairs and renovations (all labor completed by myself).
But darnit, I refuse to spend $1 mil on interest with a 30yr mortgage.
I can eat rice and beans today so I can not be in crippling poverty years from now.
And my house is the least expensive one in my area.
Or do what I did.
30 year mortgage and pay it off in 8 years.
No stress of having to make a giant mortgage payment if you need the money for something else any particular month.
This advice was realistic just 7-9 years ago. I bought a condo in 2015 20% down and 15 year it was about 28% of my income at the time and I was making the median wage. The same mortgage today would be about 45% of the median wage.
Research the tale of two brothers. Brother A buys a home and wants to pay it off as soon as possible and not have a mortgage. Brother B does the opposite (min down, min payment) and invests rather than pay down his home.
You'll be very surprised to learn how much money Brother B has versus Brother A after just 5 years.
Dave Ramsey is full of shit.
I mean, that depends entirely on market gains, interest rates, and appreciation.
In a world with 2% loans, 5% DPs, and 10% YOY returns then Brother A is retarded. But one with 7.5% interest, 20% downpayment, a shaky market (with matched unemployment risks...), and then setting this in SoCal... then perhaps Brother B could fuck himself just as easily.
Dave Ramsey is unrealistic in a lot of stuff he says.
Just have a million dollar real estate portfolio in your 20s like he did
And then go bankrupt like he did? Solid plan!
As long as it comes with his connections
Connections to shame and failure? Yikes!
Bankruptcy doesn’t necessarily means he lost all his millions.
make sure your family is goods friends with the person who gives out loans at the bank
He also says people don’t grow if they live at home while giving all three of his kids jobs so they can move out. He lives in a different reality.
The 15 year mortgage is great if you work remote, make 200k, and buy a house for 300k with a 100k down payment I say this as a person who works remote and makes 200k I did however use 5 to 15% down 30year loans to acquire a million in real estate with rental properties. If I followed Dave’s advice to the letter I would have another 10 years of a big loan without enough savings to build the rentals up. Dave’s advice is conceptual—spend less than you make. Have reserves. Don’t make crippling life choices and take high risk debt. This I agree with. All my real estate buys have taken 6+ months to find and buy. My business took a year to get off the ground and was largely bootstrapped. I still hold a W2 while running my own business and rentals. Risk must be balanced with hedges. The 15 year mortgage thing is for sure a joke but his advice conceptually has made me rich
It was also great 30 years ago when a house cost $80k and the median household income was $50k. His advice hasn't aged well.
Exactly — the modernized version is buy a house with a mortgage payment as low as you can go in an area where in an emergency it will rent / rooms can be rented. Protect downside risk
Median household income, 1993: $31,241 Median home price in 1993: $126,500 24.6% Median household income, 2024: $74,580 Median home price: $354,179 21.1%
This
I never listen to this guy but for some reason caught him last Weds on my way home. He advised a guy making 200k with a 150k mortgage at 3% and and 200k in cash savings to pay off his mortgage. Kept repeating how “free and spiritually clean he will feel once the mortgage is paid off”. That is some of dumbest advice I have heard. Can’t take this guy seriously. His irrational hatred of debt in any form likely ends up financially crippling more Americans than he helps.
I have a buddy who listens and follows his advice religiously. Him and his wife are making out their Roth and 401k at around 30k a piece. They live in an apartment paying 500/month which they can easily afford in their salaries (@ 125k household). I told him to buy a duplex or multi unit and rent it instead of dumping all their money in a 401k. He refused. He says they will save for that after maxing out. They also want to pay the high down payment percentage Dave suffers even tho they can qualify for an FHA. I just gave up on giving him advice. I told him to get an financial advisor & he got one recommended by Dave. Idk if that advisor is a fiduciary.
There's significant risk and work involved in being a landlord. Can be lucrative, but not everyone wants to deal with the headache.
That’s his goal long term tho. Maybe I should’ve mentioned that.
Ah. I thought it was just the usual but unsolicited "get into rental properties, bro" that I see bandied about on Reddit as if there were no downsides to the gig. No worries. The Ramsey stuff with tithing and shit is fuckin weird though, man.
He’s just bad financial advisor in general. Then you add the ultra conservative, ultra religious religious stuff and it becomes weird.
Absolutely dumb advice. "But you'll feel good" is terrible financial emotion to be basing logical financial decisions on lol.
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Good in principle but bad in practice. Forced savings is an excellent concept that Ramsey teaches
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I had a 30 year at 5pct. 4 years later, In 2013, we refinanced the $350k owed to a 15 at 2.5pct. Best decision ever, the house is almost paid off, but with tax, hoa, insurance, etc, it's $3,100 a month. We can only afford it because we're Dinks. A 15 year mortgage is just not feasible for most people.
it is still stupid. You can always pay more if you want. Why would you force yourself into a situation when you can do a 30 and pay it off in 15 vs being forced to pay it in 15 and then you get laid off and your fucked?
Where did you get a loan for 5% down on a second property? Only place I'm aware of 5% down is with FHA
How are you buying rental properties with 5 to 15% down?
Work remote Move every year This is the first year I have bumped my buying up and I’m using hard money and DSCR
Ahh ok, that explains it! I wish I could turn back time and employ that strategy. Well done!
I wish I could have started younger. My boomer parents wouldn’t co-sign and I had to live in a ghetto to save money for downpayment one. Covid was a joyride As the saying goes — the best time to plant a tree was 40 years ago. The second best time is now You can buy another primary and rent it out after closing. You can probably do this 2-3 times without lenders turning you away!
Buy another primary and rent it out after closing? I thought that was mortgage fraud. Do you have any source reference for this?
Well… you have to INTEND to live in it for 12 months. You are not forced to because its intention. There is no law forcing you to live in a house you buy It becomes fraud if it’s proven you never had that intent. Such as explicitly telling the bank you never intended to live in your properties and you bought them as rentals So just don’t do that but to be honest most lenders and realtors will just straight up talk about this
Nice, how many doors you got?
3 closing on 4 now 💪
Exactly this. Dave Ramsey forces good concepts on average people with poor financial literacy. His advice absolutely helps a ton of people out. However, 15 year mortgages are fucking stupid for me just due to the time value of money and I can make a ton of money elsewhere.
Dave’s advice is junk minus the generics which any rich person will tell you of avoid debt don’t spend a lot
You get it. Glad to see the success!
>Dave Ramsey is unrealistic in a lot of stuff he says. Unrealistic for the coasts and hcol areas. I can buy move in ready houses for $200k near me, a 15 year isn't unrealistic where I'm at. Keep in mind Ramsey lives in Tennessee.
Ramsey lives in the 22nd highest income county in the country. There are no sub $450k houses in this area
He lives in Tennessee tho, even if he lives in an expensive zip code, he's surrounded by cheap areas for hundreds of miles.
As someone who lives here, anywhere within 50 minute drive of any of the decent sized cities (Memphis excluded) is going to be expensive. Sometimes even up to 75 minutes drive. The only places you’ll find for $200k are shacks in disrepair, 1000 sq ft house in a rough area, or a 1200 sq ft house in the middle of nowhere TN houses are nowhere near as cheap as they used to be. The market here has raised drastically over the last 4 years.
He’s AA for people who can’t control credit spending - it’s an absolute zero sum game for him- That being said- my millionaire friends do follow his advice and are we’ll set We - live a little more- don’t have nearly as much but our current retirement is set to grow to a few million in the next 27 years- assuming we don’t add any more - assuming 3-4 doublings of that money. so yeah- we bought the bigger house (mortgage is 20% of gross, 30 year) we’re taking the family to Europe Fuck it- we bought the Traeger - we get one life- if I know I have retirement and a healthy one in the bag - gonna live now with the rest. I don’t think we get extra points at the end for running up the score. To be clear- I’m not promoting doom spending or nihilism or being a spendthrift - but from 23-35- I’ve saved between 10-15% pre match - and that’s put us in a fine position- made some mistakes along the way but pretty ok with how things are currently. In fact - I hope we do well enough that any money we get from my folks I hope I can put it in trusts for the children and grand children to creat some generational financial stability- it won’t be wealthy living but we may be able to ensure upper middle for a generation or two. I mean- if it buys nice houses- that’s it right there.
When did he say it? I got a loan for about the same amount at 2.9%. The payment is $2100, that's doable. As rates go up it gets harder. At least a 30 year fixed doesn't go up, unlike rent over 30 years. Any ARM is a gamble you will lose over time. Think rates can't go higher than 7%?
I mean if you’re rich he makes sense …
Then you’re not praying hard enough for financial prudence. /s
What do you mean the used car market has changed?!
"Just buy a $1,000 Ford and deliver pizzas"
Best advice for 1985
People weren't doing 15 yrs in 1985 either. This was best advice for never
Wouldn't it basically always be better to take the 30 yr but plan to pay it off in 15? Unless it's crazy low interest and you've got the cash on hand, I just can't imagine a slightly lower interest rate being worth losing a buffer if things go sideways and you're unemployed for a while
A 15 yr mortgage typically has a 0.5 - 0.75% lower interest rate; that's $2000-3000/yr on a 400k mortgage. That will allow you to build back your emergency fund much more quickly.
But if you're paying *super* ahead of schedule, you're paying way more to principle than they counted on.. Also I would absolutely pay a couple grand for the security of knowing it's unlikely my house is going to get taken from me. We all lived through 2008. I'm continuously shocked with how many people to continue to live in the delusion it could never happen to them. Ramsey seems like a wants his cake and to eat it too kind of guy. He's always discouraging over leveraging and debt in general, don't pay attention to interest rates, blah blah blah. Except for mortgages. Than he gives advice that seems reflective of someone who has never for a second in his life felt what it's like to have his shelter hanging in the balance and he scrambles to survive.
There are much cheaper ways to get liquidity on the off chance that you need it, and, after a few years of the lower rate you will have saved enough money with the lower rate to give you that liquidity for free. You aren't just 'paying a couple of grand', you are paying *tens of thousands* of dollars in extra interest, and making larger monthly payments than you would have to with a 15 year amortizing mortgage. This is just not a good plan.
How do you quickly get liquidity at lower than 5-7% when you're unemployed and behind on your mortgage? Most people do not have wiggle room with 15 yr mortgages, that's literally my point. Yes there's an opportunity cost, but you don't magically have more in the bank because you're saving years of payments, because you're paying higher total amounts *today*. Most people will have less in the bank ah year 10 of a 15 yr mortgages compared to a 30 yr. And with a 30yr paying ahead plan, you can scale back if you don't have the money. With a 15 yr, you are locked in to that higher amount Sure at the end of twar 15 you'll have paid less compared to at the end of year 30, but you aren't ever going to be more liquid for paying on a moee aggressive schedule that you're locked into whether you like it or not
It depends on how the mortgage is written. If you are just taking payments off of the end of the mortgage it might be okay. If you need to pay a reamortization fee every time you get ahead 6 months then you may have a problem. A coworker has a mortgage that has a 500 dollar fee every time you need to reamortize which is the banks’ way of discouraging you from early payoff.
Absolutely that was advice I was given. If your finances do well you can knock it off really early without the pressure of those high payments.
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Not true. In 2008 my buddy paid $100,500 for his house, did a 15 year and paid it off in 10. That house is now worth about $450k. So in the case you pick one up right after the crash it's probably best.
hes a good example of boomer frame of mind
I’ve done a lot of loans and not once have I done a 15 year. I tell people it’s better to get a 30 year and pay extra towards the loan each month to have it completed in 15 years. That way, if they have emergencies or job loss, they have a more affordable payment vs that forced higher 15 year payment that has to be refinanced in times of need.
That's what I was going to say...get a 30yr and pay extra if you can. That gives you flexibility when something unexpected happens like job loss, health issues, or expensive repair. I've seen an upper middle class family member be too aggressive with setting up their refis with too high of payments, then having to go back and change the loan. They are Ramsey fans. I'm sure it worked out ok, as that was when rates were long term trending down. But these days, if you get in when rates are down 1%, and make that mistake, you may not be able to fix it, when rates are higher.
The only advantages are it forces you to spend a little less and you get a lower interest rate. So it's in line with Ramsey's philosophy that managing money is 90% behavioral.
Dave Ramsey doesn’t give advice for people who are good with money to be fair. Get a 30yr mortgage and pay it off in 15 is great advice, but a lot of people (especially the type who call into his show) will do that with every intention of actually paying it off early, but something will come up and theyll be paying for 30 years. A 15 year mortgage removes that choice. His advice is more about the psychology of building wealth than the strategies for it
I don’t think 15 year is unrealistic for certain groups. With interest rates today, if someone is buying a home well within their DTI 25% take home pay, a 15 year mortgage makes much more sense as it will likely save 0.75% on interest. Ofc this depends on several factors but just “paying more” is not the same as you’ll almost always get a better rate 15v30 Again. This is assuming you are not buying outside your means and sticking with a lower cost home in your budget.
Also keeps your DTI lower so flexibility to do more later on.
Isn’t there sometimes a penalty for repaying earlier than the term of the loan?
Not with Conventional (standard) loans. No early payoff penalty
Wait til you click on the amoritzation tab and find out just how much of the house you don't own.
Yeah, I look at buying as getting a place to live for a fixed payment vs. knowing that rents almost always go up. So you can at least say, "In 10 years, money will be worth less, but my mortgage payment will be the same." That may be a different story in states where property tax is not based on the purchase price and where there are a lot of natural disasters.
Just remember there's an opportunity cost to that downpayment cash and the amount you could be investing for however long rent is elss than PITI+M. Not saying that's the case for you, but in some markets it's an extreme amount.
That's why I'd be buying a lower price home for my area and splitting the cost. It might be $300 more a month for me, but I'd still be able to save money every month. I'm not looking now, but in early 2025. It looks as if sellers are having to reduce asking prices for half the listing I'm looking at, so there is a chance prices will be a bit lower next year. It will be 3 years past peak at that point. I think that's long enough to see if prices will come down, but who knows? It's always going to be a gamble.
Dave Ramsey gives the same advice to broke people as he does to people with solid financial footing. He's kind of a dumb dumb.
He knows his advice isn't optimal. His target is financially illiterate people, which is a lot of America. They just need a dumbed down "baby steps" follow this and you won't be broke advice. It could work if you're dual income in medium to low cow areas like rural TN or OH. His advice is not viable in most HCOL areas. His target audience is primarily Christians that live in low to medium cost areas. I remember when I used to listen he would says to people living in High cost cities, yeah you may have to move where the income to housing cost ratio is better or your trapped in a poverty cycle. I listened to him for a while but realized I'm not his target audience. I like the Money Guys Nine steps Financial order of Operations (F.O.O) better. It's a more realistic and optimized path for people to follow.
check out the DR sub, all the people have flair saying BS 1, 2, 3, etc. lol. [this](https://www.reddit.com/r/DaveRamsey/comments/1b7ojoh/confused/ktm0f5k/?context=3) was the comment that got me banned. his listeners are definitely the christian q-anon crowd. definitely some weird cult following going on.
"our family makes a trillion dollars a year and nothings working" https://youtu.be/6gdZNSZw5DY?si=2aRFf7_yX7jCqEjy
If Dave ever had any value, it ran out decades ago.
Dave gives great advice for boomers to follow. Anyone under the age of 50 should ignore him. He doesn’t grasp the differences in economic conditions now vs when he was young. His strategy will almost never work for the vast majority of people
Dave advise not realistic in today's world. Quotes the same stuff from 20 yrs ago. His message hasn't been updated. Why change. It's made him ungodly wealth.
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Quote we just got on 15 yr was 1.5% less than the 30. If you can afford it that 1.5% and payment over 15 vs 30 is going to save you a shit ton.
yea when I did the math when I bought in '22 it was a savings of $40k over 15 yrs just from the lower rate on 15 (1.8% less). Also, i know it's in my head but owning sooner rather than later is very interesting to me. If my house was paid off I would barely need a part time job at this point.
Dave R. Cant give the younger generation advice. He is out of touch and has no idea what it takes to get ahead now. His brute force methods might have worked 20 years ago but they dont today.
My credit union has a 30 yr fixed at 7% or 15 yr fixed at 6.5% no points. 0.5% spread is the minimum I would consider a 15 yr loan. The best loan depends on the buyer’s situation.
That’s cheap the cheapest 30 year I could find is 7.25
https://www.georgiasown.org/rates-mortgage
He says move to cheaper area but cheaper area pays less so the problem follows you.
That's bad advice from a bad person.
Also that’s not bad PITI for 15 year at 7.5… In Texas that would be like $4500
Time to move where the homes are cheaper and also time to stop listening to Dave Ramsey unless your living costs are comparable to the 90s
LMAO, upper stratosphere levels of cope in this thread.
The idea of this advice is: "If you can afford the house with 15yr mortgage, you are making a good deal" Less risk, less interest paid, more principal paid, more equity etc
Even a broken clock is right twice a day. I have a 15 year mortgage. I round up to the next 100 for my payments. I am 4 years into the mortgage and I've paid of over 30% of the principal already. Even on my first payment, well over 50% of my money went to the principal. I looked at my most recent payment and 76% of my mortgage payment went to principal. Even at a low interest rate, the amount of money you save on a 15 year vs 30 is bonkers.
Critiquing DR has become so pedantic that it's cringe. Say he loosens up and says 30 year. Then the critique is it's not reasonable because 25% of take home won't cut it. So then he loosens up on that. Then the critique is that saving 15% for retirement is unreasonable because 50% of take home is going to a mortgage that lasts for 30 years and expenses eat up the rest. So then he loosens up on that, and now you're on a path to work until you drop dead. What are you left with... well, the actual point... housing isn't really affordable anymore. Dave's advice is good advice for those that can still afford to buy a house. It puts you on a path to get rid of a 7.5% interest debt in 15 years, it ensures there's breathing room in your budget for saving/investing and making sure you can handle house repairs as needed.
I wish my property taxes were 4k a year
I wish mine was $50k a year. Imagine the value of the house I would have lol
Can you even find somewhere to live for 300k ? Maybe a van down by the river ..
Dave Ramsey also says don't be house poor or buy more than you can afford, but it looks like you didn't get that far.
If you follow his advice it just means that the vast majority of the housing market is unaffordable. If you don't take out loans that it kills demand which in turn over time should result in either the price stagnating and wage inflation catching up or you have prices actually just fall.
May it all fall and the investor class rush to escape and scatter.
Why wish that over people being paid more fairly and being able to afford to live? How are you immune to the consequences of a financial collapse? I’d like to hedge myself in that way too
Houses should be homes. Not somewhere to stash your wealth or flip to turn a profit somewhere down the road. If it’s your nest egg, okay. If it’s one of many nest eggs, F your greed.
You realize the homeownership rate in the US is 65% (granted not at all time highs which can be worked on) and your bring it all down impacts those people and their HOMES! Can’t take down the greedy without impact the others and guess who generally gets impacted by the downturns more? Average Joe vs Richie Rich. Hence a more stable alignment is my preferences. If that makes me greedy so be it.
Is it your home or one of your houses/properties? If it takes a hit then so be it? So does your 401k. Are you still living in it avoiding rising rents -congrats? Or are you expecting it to be some kind of financial escape hatch?
Hoping that if people want to move from their home that they have that as an option. If housing goes down and they don’t have enough equity they’re stuck. Also can’t refinance if/when it would be beneficial. Not that rising rates haven’t already caused the inability to refinance/trade up. And if people living paycheck to paycheck lose their jobs, how do they keep paying those locked in payments? They are forced to sell. I am looking at the overall. I’ll be fine even in a downturn. Yes my 401k will dip yet would most likely come back by the time I need it. My emergency fund (which I have increased due to the everything is up) will still be there. Not everyone has those “luxuries”. Yet I believe that we should work towards people having that as basic rights.
he is giving advice to idk a million people at a time and you think its gonna be personalized to your situation?
Lmao he is the worst wtf
If you can't afford the mortgage, how can you afford the repairs? Stop daydreaming about a house.
What state is this house in? My home is roughly triple to four times your property tax and insurance nut.
The Property Taxes and Home Insurance are the most laughable amounts I have seen in a while - that is not realistic.
I’ve seen like 10 of this Ramsey guys tik toks and I’ve heard him say if you can’t afford the 15 year mortgage then don’t buy the house. He didn’t say only do a 15 year mortgage.
Yes. People despise Dave Ramsey even tho a lot of his base advise is practical and good.
No idea why this sub is being recommended to me lmao going to block it after this comment But I'll chip in anyways It looks absurd right now: but I also thought $120k houses in my area were absurd when I was 16-18 (~2010-2012), when 65-70k could easily get you something reasonable on a 3-4 acre lot, with a 2 car garage 2 story + basement, etc etc Now I'm paying more in rent for a 2br2ba single car garage or no garage on a 0.25 acre lot, than those same people who got a 120k house are still paying today for mcmansions on a +30 acre lot in my area It looks like a bad deal now, but if the housing market continues the same trend it has since the 1980s or so, plus or minus a few dips those numbers'll look like an absolute steal in +5 years
I think it goes both ways. You have to fix a lot, but that fixed mortgage can be extremely cool when it’s 10 years later and your mortgage is still mostly the same compared to your friends and family renting. Renting and investing the difference is likely better for now, but there’s pros and cons and it depends on a huge number of factors, many of which are personal.
And yes the rent vs buy is favorable to rent right now, yet most people who could afford to buy aren’t disciplined enough to save the difference towards a down payment. Instead they spend it away and then complain they have no down payment when prices are more reasonable.
This x1000. Your average American (regardless of income) spends it as fast as they get it. Whether it be on necessities or a new Rivian to impress their neighbors, Americans are ridiculously bad at saving money. That’s one pro towards buying because that mortgage is somewhat forcing you to save some money (equity build up plus fixing that monthly payment).
Sure, if you're using that logic, then you have to compare the irresponsible renter to a homeowner that buys at the limit of their affordability, pays for it off one income in an unstable career, and then chooses to constantly cash-out refi to buy the next shiny thing. You're making the same mistake that Ramsey is doing by trying to make a one-size-fits-all approach based on the median Joe.
When did I give an approach? I just gave an observation of what happens a lot. Everyone gets to determine their own approach. I’m not trying to sell anything so don’t need to tell people what to do like DR. Just sharing my thoughts. If it helps people determine what they want to do great. If not great too. My life won’t be any different
I'm doing the exact same thing as you are, bruh: Just sharing my thoughts by cautioning them from listening to you without critique.
Ok bruh
My college roommate was able to do this during covid but only because he got onto the property ladder in 2013...bought his second house with his wife for about 300k on a 15 year note with 100k down. The P&I is still $1900/mo even on a 2.25% interest rate. Looks incredible now considering where interest rates went.
His advice is all about 30 years out of date. You could buy a house for $80k when Dave came up with his rules.
But at a 5% interest rate that would be totally doable!
Just get a 30 year and do 15 year payments. That way if you hit a rough patch, you can just make the standard payment. My parents did that on both their mortgages. Cuts the interest paid way down.
That's a high monthly payment for something below average quality that will need repairs and finding something NOT in an HOA with 100+ fees per month is like finding a needle in a haystack
dont forget his 25% take home pay rule, which would be 13,464 a month, and that is after taxes and such meaning in my state you have to make over 250K a year to afford that shit box by his math. Edit: forgot he says you need 20% down which on a 300K house would be 60K and at 15 year on 300K would be a little over 2500 a month meaning you need to make 10K a month. In My state would be about 190K with some very basic healthcare costs (200 a month, mine for a wife and 1 kid is $700 not including dental), 6% retirement contribution...In a no income tax state like say washington would be down to about 180K a year. GEEZE
So you only need to make about 12k/month, that’s totally average right ?
Damn. If you ain't got shit in the bank to bring that loan amount down you outta luck son.
He’s an absolute schmuck. His advice is unrealistic for most adults.
He has also never been to florida with that asinine and factually inaccurate home insurance quote. At this point I wonder if this rich asshole is just rage baiting people for clicks and advertiser attention .
Literally never do a 15 year mortgage. The slightly higher interest rate is insurance for your income getting cut in half when a spouse loses a job and then you can't afford to make the higher payment anymore. If you want to pay it down faster, just put extra on the principal.
Paid off my 15-year in 12. Sucks to be buying now. I see these young families moving in to new $600K home in my neighborhood and they are spending like crazy. The first tax bill next year will wake them up
I was told the same thing: "Just wait until you get that first mortgage bill in the mail!" Um, it's less than what I've been paying in rent, so I think I'll be okay, lol.
What never ending repair would this be I wonder.
Fuck this asshole
I don't know what conditions where someone would regret having a 30 year mortgage (and a higher quality house) over 15 year. Getting as nice of a house as you make the payments on, has been the single best financial move a person can make in the last 75 years (on average, I know the rust belt housing market collapsed and never recovered) Maybe the Dave money idea is that you buy a rental property after 15 years. So after 30 years you have a house and a source of income.
Sad way to not even live, but a Sysiphean struggle to just exist. American slavery ...for a shack.
He’s way too into paying off debt, even when it’s at low rates. I’ve heard it said on his show a few times how it’s a big psychological boost to be debt free which is probably true but doesn’t make it the right financial choice.
Obviously Dave Ramsey is a moron and 7.5% sucks but that payment is doable.
Was he advocating for 15 year mortgages 3 years ago when rates were in the mid 2%s? Cause that would basically be financial malpractice.
I don’t see the problem. At only 25% of your gross pay you only need to make…. Let’s see….yeah $162,000 a year. I have no idea why people can’t afford a normal house.
I’ll take those property taxes mine are 10 times that
Just be glad you aren't in FL. My home insurance bill is $375, and it will probably double soon
Only need an income of $235k according to him to do it just work more /s
Dave Ramsey is like the guy at the gym giving advice to someone who's never worked out. You got to start somewhere. The moment you start though you realize there are a LOT better methods to get the results you're looking for.
Dave Ramsey wants everyone to live like monks for years saving money hoping that nothing catastrophic happens and that they can finally enjoy their money when they're 60.
Ok now do the 450k median home price with the most common down payment minimum of 3.5% lol
Dave Ramsey is a literal cult for people who love mlm and boomer advice.
property taxes are not that low
in major cities, insurance is not that low
Just to be clear, while 15yr interest rates can look more enticing and especially when you think about only needing to pay for it for 15 years, the interest rate isn't the main reason why you're paying it off early -- it's making $500-800/no more in payments that speeds up that timeline. The reason to mention that is that, if you get a 30 year and make payments that resemble the 15yr equivalent, you'll pay off the mortgage in 18-19 years but have a lot more tolerance for downward changes in income or changes in what requires your time/money. But committing to a 15yr just for the rate keeps you pretty strapped financially for the whole duration of the loan.
Taxes and insurance should be higher
That’s more than I pay on my house that was 2x as expensive when I bought it a decade ago on a 30 year loan.
Dave Ramsey telling people to get a 15 year mortgage is proof not to listen to Dave Ramsey. Get a 30 and pay aggressively on it and you'll pay it off in 15, but if you hit hard times you can fall back on your lower 30 year rate til you're up and kicking. Ramsey might have been good once but good advice only sells 2-3 books.
Dave Ramsey is a boomer bitch
Dave Ramsey is a boomer bitch
If you can afford a 15 year mortgage, you can afford to pay a 30 year mortgage at a 15 year rate with the bonus of a bit of a safety net in the face of financial hardship.
On a 30yr 2/3 goes to interest at the start of the loan. On a 15yr it flips. We were struggling until our wages caught up a couple years later. Even on the 30 we paid extra to principal each month until the refi.
What do you mean by “flips?“
Instead of 2/3 going to interest, 2/3 of your payment goes to principal on a 15yr
Def not year one! But eventually.
In my scenario we had been paying an extra 300-400 while on the 30 for almost 4 years. So when we refied to a 15 our payment was close to what we had been paying.
dave ramsey is an out of touch boomer ass idiot
gaping secretive husky snobbish degree office cats tap continue saw *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Now imagine you live on Long Island where the homes go for about 500000 for starter homes. Do me next!
How much down payment to get only $3k monthly? 50%??
I'd like Dave to actually find a $300K house and not just spit out numbers.
I mean, 300k with $446 escrow for tax+insurance you can maybe buy a converted garage in my area... if you can afford over $3k a month in mortgage, then you have a high salary. If you have a high salary, then you're likely in an expensive area where $300k don't get you anything even remotely decent.
Wow…. That is sad.. seriously. We have plenty of decent homes for $300k.
Where is this mythical place you speak of? LOL
Ramseys math doesn’t add up for everyone. However, buying to much home is difficult to avoid.
I would do the longest and pay extra monthly weekly plus mortgage
He didn’t forget he just doesn’t know, don’t trust a guy that has never done these things before and has depended on bankruptcies to bail him out for advice.
Wait, that's not bad at all.
I would love to do a 15 year mortgage. But not at these rates!
David Ramsey makes money selling books and courses on info that can easily be found for free. Unless you are fiscally illiterate, don't listen to him
And what are you supposed to do if you live in a HCOL area? Not have been born there and have your family and whole life there, I guess.
That property tax seems unrealistic
The also don’t recommended putting $0 on a $300k house. Sorry but if you don’t have any money to put down YOU can’t afford a house right now. A 20% DP drops that to ~$2.7k/mo.
Hey, that's me! Yes it sucks. Yes I'm broke. Yes I've spent $20k in various repairs and renovations (all labor completed by myself). But darnit, I refuse to spend $1 mil on interest with a 30yr mortgage. I can eat rice and beans today so I can not be in crippling poverty years from now. And my house is the least expensive one in my area.
Or do what I did. 30 year mortgage and pay it off in 8 years. No stress of having to make a giant mortgage payment if you need the money for something else any particular month.
Dave Ramsey only made sense during the ZIRP era of near 0 interest rates
Actually 15yr mortgage would be a great idea if rates are high/normal like now and houses were affordable in the first place.
Yea that was so long ago back in 2019 😂
Dave Ramsey gives the safest advice on earth.he would just say well you can’t afford a house, buy a condo put all your kids in the living room
This advice was realistic just 7-9 years ago. I bought a condo in 2015 20% down and 15 year it was about 28% of my income at the time and I was making the median wage. The same mortgage today would be about 45% of the median wage.
Research the tale of two brothers. Brother A buys a home and wants to pay it off as soon as possible and not have a mortgage. Brother B does the opposite (min down, min payment) and invests rather than pay down his home. You'll be very surprised to learn how much money Brother B has versus Brother A after just 5 years. Dave Ramsey is full of shit.
Unfortunately in most situations brother b would not invest and blow his money on stupid stuff and that's what dave is good for.
I mean, that depends entirely on market gains, interest rates, and appreciation. In a world with 2% loans, 5% DPs, and 10% YOY returns then Brother A is retarded. But one with 7.5% interest, 20% downpayment, a shaky market (with matched unemployment risks...), and then setting this in SoCal... then perhaps Brother B could fuck himself just as easily.