Posted on 03/07/2024 9:26:22 AM PST by where's_the_Outrage?
Radio personality Dave Ramsey has been called out online for delivering out-of-touch real estate advice to homebuyers.
“Is it even possible to follow Dave Ramsey’s advice on a mortgage?” one person asked on Reddit — and their skepticism makes sense when you do the math.
The ideal way to buy a home, according to Ramsey Solutions, the finance guru’s website, is to buy it outright in cash.
But if you’re not sitting on a mountain of money, Ramsey Solutions says the only home loan you should consider is a conventional, fixed-rate mortgage with a 15-year (or less) term. Your monthly mortgage payment also shouldn’t exceed 25% of your take home pay.
“I just don't see that happening,” the Redditor wrote, “unless your take home [pay] is more than 20% of the home's value, or maybe if you buy a one-bedroom in the bad parts of the country.”
Are they right that Ramsey’s mortgage advice is unrealistic for most Americans — or are these risk-averse recommendations reasonable? Here’s the math.
U.S. homes sold in Dec. 2023 went for a median price of $402,045, according to Redfin. For simplicity’s sake, let’s say you buy a $400,000 home with a 20% down payment of $80,000, leaving you with a mortgage principal amount of $320,000.
With a 15-year fixed rate mortgage at 6.66% — the rate as of Feb. 14 — you would have to make a monthly mortgage payment of around $2,815.
For those payments to be no more than 25% of your monthly take home pay, you’d need to earn at least $11,260 per month before taxes — and that doesn’t factor in additional housing costs such as property tax, home insurance and utilities.
(Excerpt) Read more at moneywise.com ...
Bingo!
Even better is buying a double!
That way you are right there if a renter causes problems and he will be paying your home off for you!
Depends on where you live. Are you married? Do you have a family? What's your income? A lot of factors to consider.
Thanks for the Dave Ramsey post. That guy has inspired thousands of people to get out of debt and in to financial security.
You could say the same about any type of insurance that you buy.
Go ahead, take a chance that nothing bad is going to happen to you or your possessions.
That's not primarily why the working class is suffering.
Rather than have me make the case it's simpler if you watch this clip -- Batya Sargon interviewed by Steve Bannon. Very important, perhaps the best interview in the history of War Room, according to Citizen Free Press. Watch it and internalize it. It explains what's happening, and when you hear it you'll probably agree. Start at 8:00 for the most pertinent information answering to your observations, then go back and watch the entire 11:36 interview.
https://twitter.com/CitizenFreePres/status/1765793204908023920
You said it perfectly! Life will look like a TV commercial. Bigger is better. Status obsessed people. No starting out small for them.
Our first two were fixer uppers. Young people today most often can’t fix anything.
That is absolutely true. Mostly because their parents never taught them.
The 27 year old guy next to me in my office bought his first home about four months ago. Since then he has borrowed from me my Stud Finder, two different Channel Locks, plummer’s putty and various hollow wall anchoring devises.
I had to explain how to use everyone of them. He is not intelligent. He just never did anything at home with his father/mother except mow the lawn.
I told him about how YouTube is a wealth of information how to do ANYTHING around your home.
I learned how to fix cracks in a plaster ceiling by watching a couple dozen videos on YouTube. Many of them were from the UK where houses are horse hair and plaster.
FYI, the cracks I fixed are now 8+ years old and have never cracked again. So, I guess I did it correctly.
There is some truth to that
His HQ compound replete with his name and brand everywhere is close to where I’m posting from
Id value it at 2-400 million
I doubt he paid cash
So, FreeRepublic is taking seriously a Redditor douchebag? "A single 27 year old male" "without a degree" who lives with mommy and daddy in the basement? Who says he is from "the Middle East"? Who, when he talks about a "one-bedroom in the bad part of the country", doesn't mean some mudslime ghetto like Newark, but means some white town in Idaho!
WTF is wrong with you people?
...or your house quit moving around.
This is the exact same reason why we bought our current home.
It is right on the edge of the suburbs in south central NH.
It is a 2700 sq ft salt box style house built in 1972 on 12 acres of land. We are surrounded by existing homes of similar or larger properties.
We are the third owners.
It was totally forested. With large White Pines, Oaks and Maples with in 15’ of the house. Roughly 1/3 of the roof was covered with moss. I hired a logging company that cut for a week with a feller buncher. They took about 8 trucks of logs off the property and several trailers of chips.
They installed a secondary driveway and cleared the stumps around the house.
This left me with a big mess. I then brought in an excavator who graded the lot. Diverted a intermittent stream and spread topsoil. I also installed a dry well to take the output of the washing machine and kitchen sink. Therefore, extending the life of the septic.
Since then I have brought in about another 100 yards of top soil. Planted Blueberries, fruit trees and various landscaping plantings.
I rebuilt a 10x12 garden shed.
Had to have the well pump replaced.
Brought in more gravel for the additional driveway.
Replaced all the window trim on the first floor with PVC.
Built a pavilion. Including a concrete patio and a small deck to access a hot tub. Hired a contractor to pour the concrete. Hired my electrician friend to hook up the tub.
I also bought a 38HP turbo diesel 4WD Massey Ferguson tractor. This was the most expensive vehicle I have ever bought. More expensive than my Toyota Tacoma.
I did almost all the work myself, with the exception of excavation, electrical and concrete contractors.
After almost 13 years I am starting to look at repainting the ceiling in the MBR and bath because they are peeling in a couple spots. This was the very first room we redid 12 years ago. Something we found out about actual plaster ceilings. You have to prime them with OIL BASED PRIMER ONLY.
Latex primer will eventually peel.
FWIW, I understand commuting. I had a nearly 1.5 hour commute to downtown Atlanta. I bought my first house in the early 90s at 27, and the mortgage, taxes and insurance was cheaper than rent. That is not the case anymore. I would not be able to rent or buy in the area my first home was. Husbands current commute is 45 minutes to 1 hour to drive 15 miles.
You mistake my post as “complaining”. We own our home and the home our son rents from us. This is not an issue for us. I do see it being an issue for young people.
I know if we were starting out now, there is no way we could buy a home further out, with a 2-3 hour commute each way especially if we wanted to have any time for family. Plus gas prices would eat us alive. 95 miles where I live would take probably 3-4 hours due to traffic. And that is with working in a suburb, not even downtown.
And my younger son, he cannot drive due to his epilepsy so he cannot live further out. The lower end apartments in the area where he works are around $2000/month for a 2 bedroom. Even with a roommate , that is close to half his take home pay. each month, and these apartments don’t let 4 young adult men rent a 2 bedroom.
The fixer uppers are pretty bad too, even the ones further out. Even a mobile home on a bit of land is ridiculously expensive. Land alone around me costs $100+ per acre
So, you may think I’m complaining, but what I am telling you is just the reality around here. The only reason my older son has a home is because we had the means to buy the fixer upper. He and his wife have saved enough to buy it from us this year, and not at these inflated prices. Not everyone can do what we are doing, I would guess that most don’t.
No, the house has a gutter between the first and second floor on the back. The previous owners never cleaned the gutters out the last four years they lived there(there was four layers of debris in them when I cleaned them out).
They went to Florida during the winter the last two years.
The water, ice in that gutter backed up and got between the first and second floor of the house. Staining and cracking the ceiling in the kitchen/family room.
This house as I stated was built in 1972. During the Saudi Oil embargo. So, it was originally built with electric radiant heating wires in the ceiling. They attached blue board to the ceiling joists. Stapled these 18 gauge wirde to the blue board and then covered it with about 1/4-3/8” of plaster.
I actually hired a plaster expert to help me for a couple days repairing that ceiling. We removed about a 8x10 section because it was sagging. During that I also installed recessed LED can lights in the kitchen ceiling. Moved the box for a light over the kitchen table. Then we fixed cracks and remudded with regular drywall mud. We also replaced the insulation along the back of the house that got wet.
It still looks perfect today.
That is because their parents were all software engineers and know how to code, but they can’t change a light bulb or a wall outlet.
I made my son help me with EVERYTHING.
“You could say the same about any type of insurance that you buy.”
True.
“Go ahead, take a chance that nothing bad is going to happen to you or your possessions.”
This was for a vehicle and I said to sock away the premiums for that rainy day.
Uh, nobody knows that Time Shares are a mistake more than me. And another poster said the same as you in an earlier post. The point I am making is that Ramsey is a jerk and he is overrated.
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