Bought home in 2021 at 3.0% . When everyone says ‘Do Not Buy’. Religiously paying 200$ extra towards principal on a 30 year mortgage. Home increased to 25.33% so far . Everyday I say my prayers and am blessed .
Alot of people saying that is because they want to be your landlord. It's kinda funny how it's people who own a lot of real estate that say don't buy a house. I would not want to be renting in this day and age especially. Rent is about 25 percent higher than a mortgage payment to so why not buy and put the different in your bank account for repairs and unexpected expenses.
An interest only loan worked for me...when the previous "owner" defaulted. I purchased in '09 when the bottom was falling out. 30 year fixed, but paid off in 12.5 years. I paid extra towards the principal from the 1st payment, most months and if/when I received a bonus. Look at it like investing. Do it early and often.
Really, banks require more regulation. The entire idea of banking as "let's gamble" is terrifying. Because they discovered in 2008 that the government will always bail them out, there are no repercussions. These bank crisis are so worrisome. This whole financial crisis and the Great Recession posed the most significant macroeconomic challenges for the United States in a half-century, leaving behind high unemployment and below-target inflation and calling for highly accommodative
In my opinion, some of these banks were attempting to restructure their bond portfolio, which involved selling their low-yielding bonds despite the potential loss, and compensating for it by buying higher-interest-rate bonds on the open market.
The investment returns of various investors can vary even when they employ the right methods and have the appropriate assets. It is critical to recognize that experience is a key factor in a successful investment strategy. I personally understood how important this was and sought the advice of a market analyst, which allowed me to significantly increase my account's value to around a million. Just before the market correction, I strategically withdrew my profits, and now I am again taking advantage of the buying possibilities.
I think this is something I should do, but I've been stalling for a long time now. I don't really know which firm to work with; I feel they are all the same but it seems you’ve got it all worked out with the firm you work with so i surely wouldn’t mind a recommendation.
I definitely share your sentiment about these firms. When I was starting out, I checked out a couple of freelance investors online, so you could do the same. I personally work with “Stacie Lynn Winson”, and she's is widely recognized for her proficiency and expertise in the financial market. With a comprehensive knowledge of portfolio diversification, she is acknowledged as an authority in this field. Most likely, her deets can be found on the net, so you can confirm yourself.
After conducting an online search of her name, her website quickly surfaced, piquing my curiosity. The initial impression is positive and I intend to arrange a call with her. I'll make sure to provide you with updates on how it goes. Thank you.
Bought a short sale, from day one was adding enough money to my house account to pay two additional payments a year. It’s been 7 years and I do not regret it.
My husband and I started seriously investing only 15 years ago after we paid off our house. For the last 10 years of those 15, we have put in the max allowed in our 401K's. Before the latest drop in the market we were down to $150K Now we are up to about $475K. Having a paid for home allows you to really accelerate your savings rate. The earlier you begin to SERIOUSLY save in your 401K, the quicker you will be able to live off of dividends.
bombarded with the don't sit on it during the inflation, I wanted to jump in 8/22 and did nothing. So far this year I think I need to get my feet wet, hope to speak with her soon
I like it. We have very similar paths to retirement as I am in my early 40s and starting my retirement escape plan. I have one question. How long did it take in years for your compounding to really kick in on your 401ks? For example, when did it jump from like 25-30k to over 100k? I’m just curious as i build my accounts.
Mortgage rates are currently at an all time high since 2000(23 years) and based on statistics on inflation, we might see that number skyrocket further, a 30-year fixed rate was only 5% this time last year, so do I just keep waiting for a housing crash before buying or redirect my focus to the equity market.
True, I mostly just buy and hold stocks, but my portfolio has been mostly in the red for quite awhile now. Unfortunately to be able to make good gains, you’ll need to be consistent and restructure your portfolio frequently.
In my opinion, it was much easier investing back in the 60s but it’s a lot trickier now, those making consistent profit in these times are professionals reason I’ve been using an advisor for the past 5 years to consistently build my portfolio in preparations for retirement.
To rest of the 50% club (have not checked their home replacement coverage), after listening to David, I checked my coverage. House was bought a while back for $670k, insurance replacement coverage was about the same amount. After making a few inquiries , estimated replacement today, $1.2M (yes - over a million! Yikes). We increase our coverage to cover, yes the premium went up but dear God, if something did happen and we didn’t have the coverage?? - Can’t say this pound enough - CHECK your policy, it’s don’t cost to ask. Be well all
As an independent agent, I see this a lot w/ SOME carriers, but not all, especially the ones w/ strict underwriting prior to issuing a policy. Glad your home is covered, sorry your rates went up. Did you ask after senior/alumni/etc -discounts, and make sure you report to your agent new roof/alarm/furnace. That may save you a few dollars.
I'm glad that I listened to Dave and bought a house in 2020. I am even more happy that I didn't completely follow Dave's rules. A fixed-rate mortgage is absolutely the way to go. I am locked in at a 3.25% rate which is awesome. The 15-Year mortgage term sucks, I got a 30-Year. I am glad I did because inflation made things expensive and lower payments in times of crisis helped. When there wasn't a crisis I threw a lot of extra money into the principal. I only put 3% down instead of 20%, breaking another Dave rule. Yep, I had PMI and paid $114 a month. However now that I have 20% equity, I petitioned Fannie Mae, and my PMI is GONE. Meanwhile, my house has gone up in value by $95,000.
yeah I dont get it either. A 15yr sounds like a noose around your neck. Might as well get the 30 and pay it down extra if you can, and still be done in 15. But less risk
@@garage3022 I can tell that, like me, you are not a "minimum payment person". We throw extra money towards any debt. I get that so many people don't follow our thinking and just pay what the lender says and no more. They will absolutely take 30 years to pay off a 30-year mortgage and that's sad.
@@shellyu1442 I do think he may be too aggressive for some on that point. I personally love the idea of having a paid-for house when I retire. Since I am already 54, I need to be aggressive to meet that goal.
The other thing about being aggressive towards paying a 30 year mortgage, in my case, an extra $100 bucks a month, takes off 7 years. After 6 years of paying on it.
@@aldocadena6360Exactly, Everyone should know basics of loan terms, As per loan term you may not allow to repay fully but it allows to repay portion of it. Apart from that if this caller was calling within last year, since show recording seems older. He should just put in Fix for 5% and make 2.5% interest and enjoy free money. let us say, he wish to pay $30K Extra / Year, he would put fix with 5% and start earning $1500/Year on that, while he need to pay interest $750 for the year and save $750. Off-course he can pay back his loan as he would pay current by paying more every month.
He doesn’t have to ride it to the full term or refinance which is worst, just take that money that you were going to pay to refinance fee and put it towards the principal and make some extra payments every month on principal before you realize you will be done
Yes, it was Hurricane Andrew, it was on August 24, 1992. My Father was in the Air Force and we just arrived to Homestead AFB just 3 weeks prior. We closed on a house but didn’t move in yet. We evacuated to Tampa and moved there afterwards.
I have an ARM loan but it's with the Credit Union and I owe less than $60,000, rate is less than 4 percent for 5 years, once it expired they always ask if I would like to continue with the same rate for 5 years at a cost of $500. I have no idea what type of loan this is but this is what they have offered me two years ago. I took it and am on track to pay the house off at the end of 2024.
I can’t believe David just described exactly what happened to me. I wish I had heard this before, which for some might be a common sense. Not for me, it was not. My house of 22 happy yrs living in it, burnt down back in 2021, and I don’t need to explain the rest of the story 😔 it hit me hard at the wrong time (if there is even a perfect time to lose your house) To make matters worse, I bought me “tiny” house using the “tiny” insurance money. Many insurances rejected me because of wheat had just happened. Even the insurance I’ve had for the past 22 yrs didn’t want to insure my new house. Talking about nightmare
Bought my first house in 1986 and rates were like 11%. The credit union introduced a variable rate and we said no way, it wasn’t logical, 30 year conventional only. I was 22…
State Farm is different from region to region and state to state. In Colorado, the homeowner's policies do adjust for the increase in value. In Florida (moved here 9/2022), Statefarm will not insure a home older than 2011. Check your locale for accuracy in your homeowner's insurance. FYI, the hurricane was named Andrew.
Here in MO State Farm gives you 20% extra increased dwelling coverage when you insure your home for replacement cost. So 20% of 300k being 60k thus insuring you for 360
Whats weird is that before I had ever seen any of Dave's vids or even heard of him, I sat down and came up with a plan to pay off my debts and build wealth and then when I saw Dave's content I realized it was exactly what Dave preaches.....
I’ve been diligently working, saving and contributing towards financial freedom and paying off my high interest mortgage, but the economy so far since the pandemic has eaten away most of my portfolio, what I want to know is this: Do I keep contributing to my portfolio in these unstable markets or do I look into alternative sectors.
Yeah, financial advisors could make a lot of difference, particularly in a market such as this. Stocks are pretty unstable at the moment, but if you do the right math, you should be just fine. Bloomberg and other finance media have been recording cases of folks gaining over 250k just in a matter of weeks/couple months, so I think there are a lot of wealth transfer in this downtime if you know where to look. I have been using an FA since 2020, and I return at least $30k ROI, and this does not include capital gain.
For me, Diana Casteel Lynch turned out to be better and smarter than all the advisors I ever worked with till date, I’ve never met anyone with as much conviction.
I just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a caII.
I did an ARM in 2005, adjusted in 2008. First 2 payments increased. When the market crashed my payments went down. Paid less for three years. Home value dropped 50%. No chance to refinance. Had to do a short sale. Was saved from paying taxes on the $170k loss the bank incurred because of the Bush tax forgiveness (whatever they called it) law. Will never do an ARM again.
@FrostyTheMan what area was this in? I know there was no way to know that the market value would go down that much, but the key was to either sell at that point or refinance at the end of the 3 year arm before the home lost value? Just curious… why didn’t you refi when the arm expired?
@gingerlox1050 I understood how they worked and the strategy. We did the arm because we couldn't afford a 30yr mortgage at the time. We were the next to last condo bought. 1 month later the last condo closed. $20k less than what we paid. Values did not recover during the 3 years. We couldn't have sold or refinanced at any time though we wanted too. Home was 50% underwater when the arm expired.
Great advice to the guy wanting to go to 15yr. Good news for people locked into low 30yr fixed. Almost 0 mortgages have prepay penalty nowadays. So slap on extra payments and turn it into a 10 or 15 year if you’d like. Just make sure all other debt paid off before you start paying down the 2.5% 30yr fixed mortgage loan
Those extra payments would be better kept in a side account that is liquid to the borrower. If you send extra payments to the lender, and lose your job? That money is trapped in the house, it does not lower your P&I payment, and if you lose your job, that extra money you sent will not prevent you from being foreclosed. If you made those extra payments to a side account, that money is liquid and available to you. If you lose your job, you could still make your mortgage payments until you find work. Liquidity
@@stephenmauriellomortgage that is what credit cards are for. I think one should Divide their mortgage payment by 4 and make weekly payments, also make an extra payment on the payments actual due date. You will pay close to nothing on interest and get out of a 30year loan in 10-12 years
Paid off my house about 2 years ago. Never again. I'd live in a cheap trailer before I'd get another mortgage. Didn't realize how heavy that debt weighed on me until it was gone and it was only $180k at 2.5%
Suzanne is nuts to be buying a $550k home with 0 down bringing home $100k/yr. I would find a different place to live and at least put down 10% on a $250-350k home & do a 15 - 20 yr mtg
If Suzanne lives in the PNW, then her cost is close to the median for a single family home. It might be too much to ask to uproot her entire family, career, social connections to move to a region with a more affordable median.
Great advice! Mortgage rates have skyrocketed over the years, It's recommended to save at least 15% of your income in a 401k. You can use online calculators to estimate how much you should save based on your age and income. Saving at least 15% of your income in a 401(k) can help ensure that you have enough money to retire comfortably. By saving this much, you can take advantage of compound interest and potentially grow your retirement savings over time.
For me, I believe retirees who struggle to meet their basic needs are the ones who could not accumulate enough money during their active years to meet their needs. Retirement choices determine a lot of things. My wife and I both spent same number of years in the civil service, she invested through a wealth manager and myself through the 401k. We both still earning after our retirement.
@@BodhiWilmot It's unfortunate most people don't have such information. I don't really blame people who panic. Lack of information can be a big hurdle. I've been making more than $875k by just investing through an advisor, and I don't have to do much work. Doesn't matter if the economy is misbehaving; great wealth managers will always make returns.
@@markgunter35 Interesting. I think this is something I should do, but I've been stalling for a long time now. I don't really know which firm to work with; I feel they are all the same but it seems you’ve got it all worked out with the firm you work with so i surely wouldn’t mind a recommendation.
@@Leonardjones1 My advisor is BECKY LOU GORDON , a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market
@@markgunter35 She has the appearance of being a great authority in her profession. I looked her up online and found her website, which I reviewed and went through to learn more about her credentials, academic background, and employment. She has a fiduciary duty to protect my best interests. I sent her an email outlining my objectives and also booked a session with her; thanks for sharing
A lot of people are short on their escrow accounts and payments are skyrocketing. That could trigger a house market crash, I hope so because we need one.
I'm glad I listened to Dave. I refinanced my home from a 30 year fixed rate to a 15 year fixed rate at 2%. I'm loving it and plan to pay the house off in 3 to 4 years.
I saw in a video that though dividend-paying stocks don’t offer dramatic price appreciation, they can provide a consistent income stream, I want to spread across $400k into profit yielding dividend equities but unsure of which to get into.
Speaking with an advisor helped me stay afloat in the market and grow my portfolio to about 65% since January, , and in just a few months, I was able to earn over $650K in net profit from high dividend yielding stocks. you should try it if you're unsure about the market.
I started out with a financial advisor called *Kaitlin Rose Sternberg* Her honest approach gives me complete ownership and control of my positions, and her rates are incredibly affordable given my ROI.
For the Americans out there, look into how Canadas mortgage system works. Most mortgages are 5 yr fixed, and after 5 yrs you have to negotiate a new rate.
Median list price in our area is $380k. Interest rates are 7% $76k deposit. $2732/month. For a 15 year mortgage. You need to make $131k to afford that at 25% gross income. You need to be in the top 10% of earners to afford the median home listing. 😂 No thanks. I'll build my own house with my own 2 hands for less than half the price.
Banks aren't greedy for offering variable rate mortgages because they also offer fixed rate mortgages. It's the consumer who's choosing the wrong product. The adjustable rate is simply a "stupidity tax" that banks charge.
Lock in 30 years which you will pay lesser- but add more every month or if ever you have extra money like tax refund- then you can even pay it before 30 years without that much pressure of paying a 15 year mortgage.
@@amireallythatgrumpy6508 few peopl I guess. I am new in this country and I’m about to finish mine In 2 years Godwilling- ( total of 17 instead of 30 years )it’s self disciple like what DAvid say.
Not true at all. We got a 30 year at 6% in 1996. then refinanced about 4 years later to a 15 year at around 4.5-5%. Then refi’d again when rates dropped to 3%. Once covid hit and we stopped travelling, I focused on paying off the last $106k of our mortgage. Did that in just 14 months of gazelle intensity, as DR would say. Overall, it was a total of 25 years. It would have been much less but we foolishly took out some equity along the way.
I got a 30 year loan on a $175k house when I made $42k, and barely saved up 10% down after my first 15 months on the job. Refinanced once to a 15yr to drop the rate, and ended up paying the whole thing off and buying 2acres next store ($26k) within 7 years of the purchase date. All bonuses and most raises went to the principal. It's absolutely feasible if you are both both frugal and disciplined. Most people spend everything they get their hands on....
On track to have my 30 year paid off in about 17-18 years just by paying an extra $300 - $500 a month toward the principal. The discipline it takes to do so is with anything else in life.
Side note: don't insure your home based on the property / real estate value. Those vary wildly. Insurance is to rebuild the structure so get enough insurance to rebuild the house. That could be more or less than the appraised value of the property. I think what Dave was getting at is that the cost of materials has greatly increased, causing many to be underinsured to rebuild a house of equal square footage with the same amenities.
I pay 1500 for 255k at 4% so depending on interest rates/some benefits i.e. 100% military disability where you don't have property taxes it could be possible
Hi Dave, what do you guys thing about the Canadian mortgage system vs the US. In Canada you get a maximum of 5 year fixed rate and most mortgages are 25 years, so every 5 years or less lenders go back to get a new rate while the us gives you 25 years fixed rate.
It just goes to show that getting a mortgage in Canada puts a lot more risk on the homeowner. It's probably also one reason the banking industry is more stable in Canada. As an American I was shocked to learn about how mortgages work in Canada when I moved to Ontario. We are very happy renting for now and don't plan to buy until / unless we move back to America.
Canada 🇨🇦 is ripped off country. Canada 🇨🇦 punished you for working too much and taking all your money in taxes to give it to others who refuse to work.
I was lucky to be able to secure a mortgage with a 0.9% fixed interest a while ago. I have no other debt and in Germany we do not have the health cost or student loan issue. Also credit cards are rarely used anyway. I do repay quite a lot of the principle annually and look forward for it to be paid off in 10+ years but struggle to get myself to do extra payments although I could easily.
No debt besides my house, got my emergency savings, investing 15%, but still deciding whether to save up for a rental or pay of my 3.25 interest rate mortgage…
I'm in the same position! Only debt is mortgage at 3.25, 401k and roth ira maxed out, debating paying mortgage off vs investing on my own the amount I could throw at the house...
I would either bump up your investing percentage or save up to buy real estate. No need to pay down your mortgage early especially considering cash is paying five percent right now.
Dave is 100% accurate on the need to review your policy every year. However, he’s off base a little bit with what the homeowners insurance policy actually insures. It does not insure the market value of the home, but rather the replacement cost value, I.e the cost of labor and materials to rebuild the home from the ground up. Home insurance is not meant to protect you from being upside down in an asset like a home, but rather making sure you could reasonably build the same home. For example, if the house only costs 200k to build but the property itself (land, buildings, location, etc) is worth 400k, the insurance company does not owe for that difference in value. I really urge people to read their policies and really pay attention to what it says. As an adjuster, many bad phone calls can be avoided with a little bit of research and time spent on the homeowners end, which includes even us employees of the insurance companies. Side note, the dork next to him saying he can’t get a driveway done for 300k is being hyperbolic at the least, driveways don’t cost 300k lol just more proof that you can be super smart financially and ignorant in other aspects.
Definitely these two are scaring some of these people calling in, u have to take a risk most of the time to make it happen, 2500 is ok to Pau on mortgage especially when u make 100k a year, I make 90k a year and and I bought my place for 550.k plus had my pool and whole landscaping redone and now I can actually feel like I'm living my dream and I dnt mind paying for it 2500 a month
I did a 30 year adjustable rate mortgage this year but I am planning on paying it off in 3-4 years before it adjusts. I had the option of a lower 15 year fixed mortgage but with the higher payments, I couldn't pay down the principle as fast.
Extra money sent to a lender gives security to the lender, not the homeowner. Plus that extra money you send to the lender, is locked inside the home. If you need that money, you can only access it by borrowing it, or selling the home. If you lose your job, you will not be able to borrow against your home. Keep the extra money OUTSIDE the home, so you have the use and access to the money. Pay your home off with a check, not by giving the banks extra money.
FYI, I have State Farm homeowners insurance and auto in Florida. I do a broker dive usually once a year and have never found a lower rate. Plus, a lot of insurers don't cover home and auto combos, so you end up dealing with two different companies to save a couple of bucks.
@11:17- I’m an ins. broker in MI: one client’s home is insured for 518K w/ 125% Replacement Cost. Re-quoting other carriers, replacement cost is 680K. If his house burns-down, he’s ooo-kaaay…hopefully. Don’t want to sleep under a “hopefully” though.
I just agreed with Deloney for the first time ever I think... he's absolutely correct that she has created a cloud of their finances in order to justify to herself to buy a house they couldn't afford.
Would have loved more details on finances. Seems the VA has cleared them for a pretty good chunk so I'm sure they are bringing in at least said mortgage in disability.
We did the increased value with insurance on the house when we owned one. Good to know we did do one thing right. Lol. Can you imagine townhouses where the homeowner get the bldg insurance themselves and cannot afford to rebuild but you can but you are in a mess? Condos in NC carry the insurance on the bldg but not all townhouses get the HO policy on whole bldg. that could create big messes in the case of fires and natural disasters.
Why would anyone buy a house without getting a fixed rate in the first place. This was the problem when the market crashed in 2007 because everyone was buying homes with adjusting rates. The rate goes up, and they can't afford their home and end up foreclosed on their home. Please, people listen to Dave Ramsey his always tells the truth, and he gets me out a lot of mess . I almost finish paying my house off because my wife and I are a good teammates. Every extra money we get we put it toward the principal of our mortgage loan
When the fixed rate was 6.5%, the ARM offered by a local bank was 4% for 2 years, could adjust (up or down) no more than 2% every 2 years thereafter while not being able to surpass 10%. Also, if the VA is clearing their 100k increase its a pretty safe bet they got disability checks coming in equal if not more to the mortgage.
Wish we had such long term fixed loans. The most you can get in Australia is 5 years and the Banks highly dissuade you from that, suggesting 2-3 years max.
Need some tips...... I have 6k in my savings account. I have 3 Credit cards and owe a total of $4,700,im paying 0 interest until July 2024. I also have a car loan which I owe $5,460(4%).... I was thinking of leaving $1,000 in my savings account and using the 5k to pay off my credit cards. After I pay those off I was going to use the money I used to pay my credit cards,$350, and add them to the car payment. What are your thoughts???
If those credit cards have a chance that all the interest from the entire deferred period is added on than pay them off. Otherwise I would say to pay off the car loan first. Either way you are getting rid of a payment and that should moral boost you to getting rid of the other.
@urbansolis First, I hope you write an accurate budget each month. If the credit cards are on an introductory offer, if you don't pay them off in full by June 2024, you will be charged interest from the day you made your first purchase ... not on the current balance. And, I'm sure the interest rate is very high. Use savings to pay off the credit cards now, in full. Add what you were paying on the credit cards to your monthly car payment, add more if you can, pay that every month. When the car is paid off, go back to building your savings. You could add what you were paying on your credit cards and car and deposit that total into savings each month, add more if you want. ... Credit cards paid off, car paid off and you're building your savings. Good work!
@tamaraliscia3408 Thank you. I just checked, and the only one that had a deferred interest is my best buy CC. This is the one with the smallest amount, so I am attacking it using the snowball method. The others don't seem to have any defered nterests, based on my statements, but I will contact them tomorrow to see if they do. One of the CC was a balance transfer for 4k, which I now I owe 3k. That one is interest-free until Feb 2025. The best buy should be paid by December. The other is interest-free until May 2024. I believe I should have that one paid off by Feb. I'm just confused about how to pay off my car loan without paying a whole lot of interest. How do I send payments directly to the principal? Thanks for your reply:)
A VA loan is the absolute BEST way to go! You don't need a down payment and you don't pay PMI. If you don't have to pay a down payment, I don't know what's bad about that, especially with the way house values are going up.
Because why would you want to only put 0% down? That’s that much more interest you need to pay on it now. If you’re not in a position to put 20% down, you’re getting too big of a house or you need to save up more. I’m a veteran and the VA loan is definitely not a benefit. I am working hella OT to build up as much $ as I can before my house is done being built and I already can put 35% down on a 580k house. My goal would be 40%. This way you already have equity in your house instantly on closing.
@@whitneyfullerton4897 I'm also a Veteran and I disagree. The mortgage amount you qualify for is directly based on your income, regardless of downpayment. In each scenario, downpayment or not, if the mortgage payment does not exceed 25% of net income, why would you choose to throw money away on rent if you can instead purchase with 0% down? The logical answer is to take advantage of a VA mortgage with no PMI and no fees for disabled veterans. THIS IS A BENEFIT.
I'm a Veteran. Dave Ramsey is providing bad advice to Veterans when he speaks against VA mortgages. There is NO PMI and disabled Veterans pay NO fees. His advise tells us to instead throw money away on rent, when we could purchase a home and build equity. Dave Ramsey needs to stop spreading misinformation.
ARMs can be a solid option for short term living. If your rate doesnt adjust for 3 years but youre only looking to stay in the home for a couple years, it can make a lot of sense!
I'm a Veteran. Dave Ramsey is providing bad advice to Veterans when he speaks against VA mortgages. There is NO PMI and disabled Veterans pay NO fees. His advise tells us to instead throw money away on rent, when we could purchase a home and build equity. If the mortgage does not exceed 25% of net income, why would you rent or make a 20% downpayment? Dave Ramsey needs to stop spreading misinformation.
Same here! Bought my house in 2020 with a 30-yr VA loan at 2.25%. No money down, no PMI. Closing costs were covered as I went with the builder's preferred lender. Paid VA loans fees and some other fees, which weren't much in the scheme of things.
Also you don’t pay property tax in some states. I think unless you managed to save up or inherit the money to buy a house without a loan, VA is a good option especially with a solid down payment and ESPECIALLY if you’re a disabled vet (the higher % the more incentives.)
I agree with not getting into debt on unnecessary items, but Ramsey will forever be wrong about credit cards. A well managed credit card will not only give you better interest rates on mortgages, but also have lots of perks (I.e airline points, cashback) which are effectively free if you pay off the balance in full and don’t incur interest.
Not that I agree w him because I pay off mines every month. He is just saying he doesn’t like credit cards because you are more likely to spend more with a credit card and he is all about saving.
The first realtor I delt with talked about fix vs variable interest rates. He said the only sane assumption for a variable is the interest will go up the max every year and top off at the cap,. Forever. Always do a fixed you can afford and refinance when it makes sense.
Why would someone want a bigger house after they paid off the mortgage, unless you live in a very tiny house and you wife always wanted a bigger house.
Do you both have children? Do you have enough room for the children? If no children involved then I'm pretty sure the paid off home you both have is just fine! Hope she get her head on straight and enjoy being mortgage free!
Adjustable rate mortgages are bad news I remember back in the 1980s when interest rates went to 18 percent so many people lost their homes and had to hand the keys to their homes back to the bank. Yes interest rates were that high back then so this isn’t something new. Three percent mortgages were unheard of for years and years and years. My parents probably had a 2 or 3 percent mortgage back in 1953. Five , six and 7 percent mortgages were normal back in the early 1990s. So I do not understand what the big surprise is at 7 and 8 percent mortgages 30 years later in 2023
you can't build a driveway with 300k, you can build a missive house for 300k just would need the land which I'm assuming isn't destroyed. I do agree with there point as a whole though with different values it makes perfect sense.
i have 3.5% fixed with MIP for the life of loan (didn't know that; thought it would fall off). should i refinance to stop the $133 payment in MIP. I am paying extra and this would go to the principal if I was able to get it off or should I just keep it? wait for it to go down... my goal is to pay off quicker and safe interest. thanks for any advice!
Interesting,I don't think you can fix for any longer than five years here in nz. Obviously a negative if you have a super low rate like what was on offer during covid times, but removes the massive break fees if you need to break a mortgage agreement. Mine comes up for refixing soon but will likely only fix for six months as interest rates are still forecasted to drop over the next 12 months
I have a fixed rate mortgage. The monthly payment still goes up every year due to insurance and taxes. In fact its gone up over 100 per month each year for the last two years. An adjustable rate would be even worse.
Is it wise to consolidate the balance of a HELOC into your mortgage when renewing and make double payments or is it better to leave it as is and treat it as a separate debt?
it looks like a typical office phone but built into the desk. He probably uses it to mute people not hang up but also transfer people to one of their agents.
You see, what has happening to tons of people who followed Dave’s mortgage advice are now looking at the most unaffordable housing market in history. Saving up 20% and making sure you can afford a 15 year mortgage was always a very difficult task for most Americans to pull off. If you are trying to save up $20-60k to put 20% down on a house would take years for a lot of people. If you went in with 5-10% in 2018, you would have the PMI, but you would also have a house. This is a horrible housing market for buyers and with the lack of supply, I don’t see home prices coming down anytime soon. If you have no other debt and 2 decent incomes, you can easily make a mortgage that is 25-30% of your take home pay without issue. Dave is way too strict with his mortgage advice and that has probably cost a lot of people having been able to buy a house before the market went crazy and are likely looking at never being able to buy this decade.
My husband and I were first time home buyers in 2018… single income fam with 2 kids. we live near Austin tx and it was insane buying a house. We were outbid above asking price several times. We ended up getting a zero down loan in a 199k house. We were house poor for the first year but we survived. Now, 5 years later we have over $100k in equity because our home value has increased so much. We’re planning to move into a slightly bigger house soon bc we have 4 kids now and want another bedroom. We would’ve rented forever if we hadn’t gotten into the housing market back then! All that to say…. Advice is helpful but you still have to make decisions (and sacrifices) based on your personal situation!
My Girlfriend and I bring in more together than their entire household income and we would NEVER have considered a half a million dollar home, especially at current rates. That sounds like a nightmare waiting to happen.
Exactly… our combined income is about 200k and I would only consider a purchase at a low fixed rate with 20% down. I own two rentals in California but I rent where I live. I had to work backwards to create more income to build wealth. We hope to purchase our third property at the end of 2024 with 20% down. Still waiting to buy our own but the income from the rentals is keeping us above inflation. I could never have achieved owning two rental homes in California following Dave’s recommendations. Please seek other opinions and not from realtors or lenders or those with a motive.
Hi I need advice. I have not any loan or anything. I have coffee shop business. Business so so because of difficult time . I have $800k in wall st . I like to buy house, what should I do, 100% down payment? Or mortgage? Please advise me .....🙏🙏🙏🙏🙏🙏
My son bought his first house with an FHA and 10k doen and got a PMI with that. We all assumed when he got to 20% that would drop off, NOPE!!!! He is stuck with it for the life of the loan
I had a wholesale lender try to get a loan with them to buy a house.they said I can get better interest with them . Then if I go to bank or a broker.what u think ? Is it really going to help me or them ? Long run and short term ?
Bought home in 2021 at 3.0% . When everyone says ‘Do Not Buy’. Religiously paying 200$ extra towards principal on a 30 year mortgage. Home increased to 25.33% so far . Everyday I say my prayers and am blessed .
Alot of people saying that is because they want to be your landlord. It's kinda funny how it's people who own a lot of real estate that say don't buy a house. I would not want to be renting in this day and age especially. Rent is about 25 percent higher than a mortgage payment to so why not buy and put the different in your bank account for repairs and unexpected expenses.
An interest only loan worked for me...when the previous "owner" defaulted.
I purchased in '09 when the bottom was falling out. 30 year fixed, but paid off in 12.5 years. I paid extra towards the principal from the 1st payment, most months and if/when I received a bonus.
Look at it like investing. Do it early and often.
House in 09 were like 250
@@SB0458 Hahaha. My older small home on an acre was 105k. Previous owner paid 345k in '06. In California...
Really, banks require more regulation. The entire idea of banking as "let's gamble" is terrifying. Because they discovered in 2008 that the government will always bail them out, there are no repercussions. These bank crisis are so worrisome. This whole financial crisis and the Great Recession posed the most significant macroeconomic challenges for the United States in a half-century, leaving behind high unemployment and below-target inflation and calling for highly accommodative
In my opinion, some of these banks were attempting to restructure their bond portfolio, which involved selling their low-yielding bonds despite the potential loss, and compensating for it by buying higher-interest-rate bonds on the open market.
The investment returns of various investors can vary even when they employ the right methods and have the appropriate assets. It is critical to recognize that experience is a key factor in a successful investment strategy. I personally understood how important this was and sought the advice of a market analyst, which allowed me to significantly increase my account's value to around a million. Just before the market correction, I strategically withdrew my profits, and now I am again taking advantage of the buying possibilities.
I think this is something I should do, but I've been stalling for a long time now. I don't really know which firm to work with; I feel they are all the same but it seems you’ve got it all worked out with the firm you work with so i surely wouldn’t mind a recommendation.
I definitely share your sentiment about these firms. When I was starting out, I checked out a couple of freelance investors online, so you could do the same. I personally work with “Stacie Lynn Winson”, and she's is widely recognized for her proficiency and expertise in the financial market. With a comprehensive knowledge of portfolio diversification, she is acknowledged as an authority in this field. Most likely, her deets can be found on the net, so you can confirm yourself.
After conducting an online search of her name, her website quickly surfaced, piquing my curiosity. The initial impression is positive and I intend to arrange a call with her. I'll make sure to provide you with updates on how it goes. Thank you.
Bought a short sale, from day one was adding enough money to my house account to pay two additional payments a year. It’s been 7 years and I do not regret it.
My husband and I started seriously investing only 15 years ago after we paid off our house. For the last 10 years of those 15, we have put in the max allowed in our 401K's. Before the latest drop in the market we were down to $150K Now we are up to about $475K. Having a paid for home allows you to really accelerate your savings rate. The earlier you begin to SERIOUSLY save in your 401K, the quicker you will be able to live off of dividends.
Did you adjust your fund allocation at all during that time?
@Watkinsgorge i'm not a pro but will recommend you can speak with an expert, Martha Cornell Kerns, she will have answers to you question
bombarded with the don't sit on it during the inflation, I wanted to jump in 8/22 and did nothing. So far this year I think I need to get my feet wet, hope to speak with her soon
@@addahHusayn best wishes
I like it. We have very similar paths to retirement as I am in my early 40s and starting my retirement escape plan. I have one question. How long did it take in years for your compounding to really kick in on your 401ks? For example, when did it jump from like 25-30k to over 100k? I’m just curious as i build my accounts.
Mortgage rates are currently at an all time high since 2000(23 years) and based on statistics on inflation, we might see that number skyrocket further, a 30-year fixed rate was only 5% this time last year, so do I just keep waiting for a housing crash before buying or redirect my focus to the equity market.
The stock market is no different, to maintain profit, you need to have some in-depth knowledge on the market.
True, I mostly just buy and hold stocks, but my portfolio has been mostly in the red for quite awhile now. Unfortunately to be able to make good gains, you’ll need to be consistent and restructure your portfolio frequently.
In my opinion, it was much easier investing back in the 60s but it’s a lot trickier now, those making consistent profit in these times are professionals reason I’ve been using an advisor for the past 5 years to consistently build my portfolio in preparations for retirement.
@@BernardFrederick-tk7un my partner’s been considering going the same route, could you share more info please on the advisor that guides you.
Annette Marie Holt is the licensed advisor I use. Just search the name. You’d find necessary details to work with to set up an appointment.
To rest of the 50% club (have not checked their home replacement coverage), after listening to David, I checked my coverage. House was bought a while back for $670k, insurance replacement coverage was about the same amount. After making a few inquiries
, estimated replacement today, $1.2M (yes - over a million! Yikes). We increase our coverage to cover, yes the premium went up but dear God, if something did happen and we didn’t have the coverage?? - Can’t say this pound enough - CHECK your policy, it’s don’t cost to ask. Be well all
As an independent agent, I see this a lot w/ SOME carriers, but not all, especially the ones w/ strict underwriting prior to issuing a policy.
Glad your home is covered, sorry your rates went up. Did you ask after senior/alumni/etc -discounts, and make sure you report to your agent new roof/alarm/furnace. That may save you a few dollars.
@@Laura-ed5kf that's an excellent suggestion, I will give my company a call regarding a seniors discount!
Look at what similar home sq ft costs new and figure your replacement about same
Love the passion in Dave’s voice… I listen to this every morning
I'm glad that I listened to Dave and bought a house in 2020. I am even more happy that I didn't completely follow Dave's rules. A fixed-rate mortgage is absolutely the way to go. I am locked in at a 3.25% rate which is awesome. The 15-Year mortgage term sucks, I got a 30-Year. I am glad I did because inflation made things expensive and lower payments in times of crisis helped. When there wasn't a crisis I threw a lot of extra money into the principal. I only put 3% down instead of 20%, breaking another Dave rule. Yep, I had PMI and paid $114 a month. However now that I have 20% equity, I petitioned Fannie Mae, and my PMI is GONE. Meanwhile, my house has gone up in value by $95,000.
yeah I dont get it either. A 15yr sounds like a noose around your neck. Might as well get the 30 and pay it down extra if you can, and still be done in 15. But less risk
@@garage3022 I can tell that, like me, you are not a "minimum payment person". We throw extra money towards any debt. I get that so many people don't follow our thinking and just pay what the lender says and no more. They will absolutely take 30 years to pay off a 30-year mortgage and that's sad.
100% agreed @@garage3022
His advice of aggressively Paying off a 3% mortgage today makes no sense, not when rates are 7%
@@shellyu1442 I do think he may be too aggressive for some on that point. I personally love the idea of having a paid-for house when I retire. Since I am already 54, I need to be aggressive to meet that goal.
The other thing about being aggressive towards paying a 30 year mortgage, in my case, an extra $100 bucks a month, takes off 7 years. After 6 years of paying on it.
How much was your house?
Dude trying to refinance his 2.5% rate is wild. Ride that thing for the full term.
Guy do t know how math works. That is mind blowing!!!
@@aldocadena6360Exactly, Everyone should know basics of loan terms, As per loan term you may not allow to repay fully but it allows to repay portion of it. Apart from that if this caller was calling within last year, since show recording seems older. He should just put in Fix for 5% and make 2.5% interest and enjoy free money.
let us say, he wish to pay $30K Extra / Year, he would put fix with 5% and start earning $1500/Year on that, while he need to pay interest $750 for the year and save $750.
Off-course he can pay back his loan as he would pay current by paying more every month.
@@aldocadena6360refi @ 2.5%
Seriously??
@@aldocadena6360that’s the school system for you. It’s not an education it’s rote memorizing and indoctrination.
He doesn’t have to ride it to the full term or refinance which is worst, just take that money that you were going to pay to refinance fee and put it towards the principal and make some extra payments every month on principal before you realize you will be done
I need to update my home owners insurance on my paid for home. Thanks for the reminder Dave!! 😊
Same here. Didn't think about this one.
Hurricane Andrew-my mother works insurance. This hurricane changed a lot of things in Florida.
Yes, it was Hurricane Andrew, it was on August 24, 1992. My Father was in the Air Force and we just arrived to Homestead AFB just 3 weeks prior. We closed on a house but didn’t move in yet. We evacuated to Tampa and moved there afterwards.
I have an ARM loan but it's with the Credit Union and I owe less than $60,000, rate is less than 4 percent for 5 years, once it expired they always ask if I would like to continue with the same rate for 5 years at a cost of $500. I have no idea what type of loan this is but this is what they have offered me two years ago. I took it and am on track to pay the house off at the end of 2024.
I don't have that rate deal but I have an ARM but plan to pay it off or sell in 3-4 years so the lower rate made sense.
I can’t believe David just described exactly what happened to me.
I wish I had heard this before, which for some might be a common sense. Not for me, it was not.
My house of 22 happy yrs living in it, burnt down back in 2021, and I don’t need to explain the rest of the story 😔 it hit me hard at the wrong time (if there is even a perfect time to lose your house)
To make matters worse, I bought me “tiny” house using the “tiny” insurance money.
Many insurances rejected me because of wheat had just happened.
Even the insurance I’ve had for the past 22 yrs didn’t want to insure my new house.
Talking about nightmare
I'm so sorry that happened to you ❤ I hope you are living better now may God bless you 🙏
@@rosa4660
Refreshing to find a person who will give you great advice without trying to sell you a course
Agree 💯
He literally has a course that he sells
@@haydncook6503 Agreed, but while he pushes it a smidge he really doesn't push it nearly as much as other similar folks ...
Yea he's not that much different
Yes, a course that cost less than a bloated cable bill. A course that can change your life and children's lives.
Bought my first house in 1986 and rates were like 11%. The credit union introduced a variable rate and we said no way, it wasn’t logical, 30 year conventional only. I was 22…
You refinanced it all the way down though, right? Might incur fines but they were probably worth it
State Farm is different from region to region and state to state. In Colorado, the homeowner's policies do adjust for the increase in value. In Florida (moved here 9/2022), Statefarm will not insure a home older than 2011. Check your locale for accuracy in your homeowner's insurance. FYI, the hurricane was named Andrew.
They stopped home owners insurance here in Ca
Here in MO State Farm gives you 20% extra increased dwelling coverage when you insure your home for replacement cost. So 20% of 300k being 60k thus insuring you for 360
Whats weird is that before I had ever seen any of Dave's vids or even heard of him, I sat down and came up with a plan to pay off my debts and build wealth and then when I saw Dave's content I realized it was exactly what Dave preaches.....
1:29 "My ticket to homeownership"
With the way things are going, you won't own the home .....the home will own you.
You can thank Joe Biden and the Democrats for the inflation. This is ALL on their watch.
Better throw my down payment in TSLA out of the money calls that expire in a day!!!!!!! LETS FREAKING GOOOO
Thank you for teaching God's way on debt. It has been a tremendous blessing for us.
Sure
I’ve been diligently working, saving and contributing towards financial freedom and paying off my high interest mortgage, but the economy so far since the pandemic has eaten away most of my portfolio, what I want to know is this: Do I keep contributing to my portfolio in these unstable markets or do I look into alternative sectors.
Just try to diversify your portfolio to other market sectors, that way your investment is balanced and you don’t get to make so much losses.
Yeah, financial advisors could make a lot of difference, particularly in a market such as this. Stocks are pretty unstable at the moment, but if you do the right math, you should be just fine. Bloomberg and other finance media have been recording cases of folks gaining over 250k just in a matter of weeks/couple months, so I think there are a lot of wealth transfer in this downtime if you know where to look. I have been using an FA since 2020, and I return at least $30k ROI, and this does not include capital gain.
Would you mind telling me how to contact this specific coach using their service? You seem to have the solution, as opposed to the rest of us.
For me, Diana Casteel Lynch turned out to be better and smarter than all the advisors I ever worked with till date, I’ve never met anyone with as much conviction.
I just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a caII.
If you can not afford a fixed rate maybe you need to reduce the house size smaller.
I did an ARM in 2005, adjusted in 2008. First 2 payments increased. When the market crashed my payments went down. Paid less for three years. Home value dropped 50%. No chance to refinance. Had to do a short sale. Was saved from paying taxes on the $170k loss the bank incurred because of the Bush tax forgiveness (whatever they called it) law. Will never do an ARM again.
Arms are trash.
What about getting an arm to do a flip in today's market? @@shanew7361
My parents lost the home that we grew up in in 2010 after the arm got so bad and the fact the kept pulling the equity
@FrostyTheMan what area was this in? I know there was no way to know that the market value would go down that much, but the key was to either sell at that point or refinance at the end of the 3 year arm before the home lost value? Just curious… why didn’t you refi when the arm expired?
@gingerlox1050 I understood how they worked and the strategy. We did the arm because we couldn't afford a 30yr mortgage at the time. We were the next to last condo bought. 1 month later the last condo closed. $20k less than what we paid. Values did not recover during the 3 years. We couldn't have sold or refinanced at any time though we wanted too. Home was 50% underwater when the arm expired.
Great advice to the guy wanting to go to 15yr. Good news for people locked into low 30yr fixed. Almost 0 mortgages have prepay penalty nowadays. So slap on extra payments and turn it into a 10 or 15 year if you’d like. Just make sure all other debt paid off before you start paying down the 2.5% 30yr fixed mortgage loan
Those extra payments would be better kept in a side account that is liquid to the borrower. If you send extra payments to the lender, and lose your job? That money is trapped in the house, it does not lower your P&I payment, and if you lose your job, that extra money you sent will not prevent you from being foreclosed.
If you made those extra payments to a side account, that money is liquid and available to you. If you lose your job, you could still make your mortgage payments until you find work. Liquidity
@@stephenmauriellomortgage that is what credit cards are for. I think one should Divide their mortgage payment by 4 and make weekly payments, also make an extra payment on the payments actual due date. You will pay close to nothing on interest and get out of a 30year loan in 10-12 years
Paid off my house about 2 years ago. Never again. I'd live in a cheap trailer before I'd get another mortgage. Didn't realize how heavy that debt weighed on me until it was gone and it was only $180k at 2.5%
You just have low risk tolerance.
I have a mortgage on a multi-million dollar home and am not stressed at all.
The peace of mind is wonderful Connie.
@@15KHPCLUBlike they say, "theres levels to this"
How do I convince my wife to this
If you can't convince her she may not be the right one. I am sorry to say that.
No! They need to learn from those who lost homes in 2008-09 bc of ARM so many of my friends bought and lost their first home back then from that
Suzanne is nuts to be buying a $550k home with 0 down bringing home $100k/yr. I would find a different place to live and at least put down 10% on a $250-350k home & do a 15 - 20 yr mtg
If Suzanne lives in the PNW, then her cost is close to the median for a single family home. It might be too much to ask to uproot her entire family, career, social connections to move to a region with a more affordable median.
Property tax, insurance, hoa and maintenance will eat another $1500 per month so they will end up paying 50% of take home pay in mortgage.
Great advice! Mortgage rates have skyrocketed over the years, It's recommended to save at least 15% of your income in a 401k. You can use online calculators to estimate how much you should save based on your age and income. Saving at least 15% of your income in a 401(k) can help ensure that you have enough money to retire comfortably. By saving this much, you can take advantage of compound interest and potentially grow your retirement savings over time.
For me, I believe retirees who struggle to meet their basic needs are the ones who could not accumulate enough money during their active years to meet their needs. Retirement choices determine a lot of things. My wife and I both spent same number of years in the civil service, she invested through a wealth manager and myself through the 401k. We both still earning after our retirement.
@@BodhiWilmot It's unfortunate most people don't have such information. I don't really blame people who panic. Lack of information can be a big hurdle. I've been making more than $875k by just investing through an advisor, and I don't have to do much work. Doesn't matter if the economy is misbehaving; great wealth managers will always make returns.
@@markgunter35 Interesting. I think this is something I should do, but I've been stalling for a long time now. I don't really know which firm to work with; I feel they are all the same but it seems you’ve got it all worked out with the firm you work with so i surely wouldn’t mind a recommendation.
@@Leonardjones1 My advisor is BECKY LOU GORDON , a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market
@@markgunter35 She has the appearance of being a great authority in her profession. I looked her up online and found her website, which I reviewed and went through to learn more about her credentials, academic background, and employment. She has a fiduciary duty to protect my best interests. I sent her an email outlining my objectives and also booked a session with her; thanks for sharing
A lot of people are short on their escrow accounts and payments are skyrocketing. That could trigger a house market crash, I hope so because we need one.
FYI, VA Loans do not require PMI
I'm glad I listened to Dave. I refinanced my home from a 30 year fixed rate to a 15 year fixed rate at 2%. I'm loving it and plan to pay the house off in 3 to 4 years.
When did you do this?
@@Beloved1144 I did it 2 years ago.
theres no PMI ON V.A LOANS
I saw in a video that though dividend-paying stocks don’t offer dramatic price appreciation, they can provide a consistent income stream, I want to spread across $400k into profit yielding dividend equities but unsure of which to get into.
Speaking with an advisor helped me stay afloat in the market and grow my portfolio to about 65% since January, , and in just a few months, I was able to earn over $650K in net profit from high dividend yielding stocks. you should try it if you're unsure about the market.
my partner’s been considering going the same route, could you share more info please on the advisor that guides you
I started out with a financial advisor called *Kaitlin Rose Sternberg* Her honest approach gives me complete ownership and control of my positions, and her rates are incredibly affordable given my ROI.
She appears to be well-educated and well-read. I ran an online search on her name and came across her website; thank you for sharing.
There is no PMI on a VA loan
This is correct.
Of course he spread mis-information.
But a $550k mortgage and no money down??? I don’t think that (iffy) $100K income is sufficient
@@Lionheart_He-Man The income qualification factor is the same, whether you have a downpayment or not. 25% of net income doesn't change.
I'm tired of the misinformation that is spread by Dave Ramsey regarding VA mortgages.
For the Americans out there, look into how Canadas mortgage system works. Most mortgages are 5 yr fixed, and after 5 yrs you have to negotiate a new rate.
omg!!!! you are kidding ...wow
Median list price in our area is $380k. Interest rates are 7%
$76k deposit.
$2732/month. For a 15 year mortgage.
You need to make $131k to afford that at 25% gross income.
You need to be in the top 10% of earners to afford the median home listing. 😂
No thanks.
I'll build my own house with my own 2 hands for less than half the price.
Banks aren't greedy for offering variable rate mortgages because they also offer fixed rate mortgages. It's the consumer who's choosing the wrong product.
The adjustable rate is simply a "stupidity tax" that banks charge.
Lock in 30 years which you will pay lesser- but add more every month or if ever you have extra money like tax refund- then you can even pay it before 30 years without that much pressure of paying a 15 year mortgage.
Nobody has the discipline to do that. If you get a 30 year you will take 30 years to pay it
@@amireallythatgrumpy6508 few peopl I guess. I am new in this country and I’m about to finish mine In 2 years Godwilling- ( total of 17 instead of 30 years )it’s self disciple like what DAvid say.
Not true at all. We got a 30 year at 6% in 1996. then refinanced about 4 years later to a 15 year at around 4.5-5%. Then refi’d again when rates dropped to 3%. Once covid hit and we stopped travelling, I focused on paying off the last $106k of our mortgage. Did that in just 14 months of gazelle intensity, as DR would say. Overall, it was a total of 25 years. It would have been much less but we foolishly took out some equity along the way.
I got a 30 year loan on a $175k house when I made $42k, and barely saved up 10% down after my first 15 months on the job. Refinanced once to a 15yr to drop the rate, and ended up paying the whole thing off and buying 2acres next store ($26k) within 7 years of the purchase date. All bonuses and most raises went to the principal. It's absolutely feasible if you are both both frugal and disciplined. Most people spend everything they get their hands on....
On track to have my 30 year paid off in about 17-18 years just by paying an extra $300 - $500 a month toward the principal.
The discipline it takes to do so is with anything else in life.
Side note: don't insure your home based on the property / real estate value. Those vary wildly. Insurance is to rebuild the structure so get enough insurance to rebuild the house. That could be more or less than the appraised value of the property. I think what Dave was getting at is that the cost of materials has greatly increased, causing many to be underinsured to rebuild a house of equal square footage with the same amenities.
Just the message I've been praying for 🙏 Thank you!
How do you get a 550K house for 2,500/month? Were they leaving out insurance and taxes?
I pay 1500 for 255k at 4% so depending on interest rates/some benefits i.e. 100% military disability where you don't have property taxes it could be possible
i don't think that's possible, there are a lot of hidden cost they are not according for.
Not possible, 550k 0 down payment is at least $ 4 500 a month
@@ia6980 Yep she probably means quite literally only the mortgage. No insurance, no tax (no escrow), no maintenance planning.
Hi Dave, what do you guys thing about the Canadian mortgage system vs the US.
In Canada you get a maximum of 5 year fixed rate and most mortgages are 25 years, so every 5 years or less lenders go back to get a new rate while the us gives you 25 years fixed rate.
It just goes to show that getting a mortgage in Canada puts a lot more risk on the homeowner. It's probably also one reason the banking industry is more stable in Canada. As an American I was shocked to learn about how mortgages work in Canada when I moved to Ontario. We are very happy renting for now and don't plan to buy until / unless we move back to America.
Canada 🇨🇦 is ripped off country. Canada 🇨🇦 punished you for working too much and taking all your money in taxes to give it to others who refuse to work.
Wow I never considered my home owners insurance policy.... thanks Dave
Thats why a VA loan is a great way to have.
I was lucky to be able to secure a mortgage with a 0.9% fixed interest a while ago. I have no other debt and in Germany we do not have the health cost or student loan issue. Also credit cards are rarely used anyway. I do repay quite a lot of the principle annually and look forward for it to be paid off in 10+ years but struggle to get myself to do extra payments although I could easily.
great compilation of videos for new buyers. thank you!
No debt besides my house, got my emergency savings, investing 15%, but still deciding whether to save up for a rental or pay of my 3.25 interest rate mortgage…
Pay off your mortgage then get the rental property after.
Sell the truck
Asking for a headache with 2 mortgages.
I'm in the same position! Only debt is mortgage at 3.25, 401k and roth ira maxed out, debating paying mortgage off vs investing on my own the amount I could throw at the house...
I would either bump up your investing percentage or save up to buy real estate. No need to pay down your mortgage early especially considering cash is paying five percent right now.
Dave is 100% accurate on the need to review your policy every year. However, he’s off base a little bit with what the homeowners insurance policy actually insures. It does not insure the market value of the home, but rather the replacement cost value, I.e the cost of labor and materials to rebuild the home from the ground up. Home insurance is not meant to protect you from being upside down in an asset like a home, but rather making sure you could reasonably build the same home. For example, if the house only costs 200k to build but the property itself (land, buildings, location, etc) is worth 400k, the insurance company does not owe for that difference in value. I really urge people to read their policies and really pay attention to what it says. As an adjuster, many bad phone calls can be avoided with a little bit of research and time spent on the homeowners end, which includes even us employees of the insurance companies. Side note, the dork next to him saying he can’t get a driveway done for 300k is being hyperbolic at the least, driveways don’t cost 300k lol just more proof that you can be super smart financially and ignorant in other aspects.
Definitely these two are scaring some of these people calling in, u have to take a risk most of the time to make it happen, 2500 is ok to Pau on mortgage especially when u make 100k a year, I make 90k a year and and I bought my place for 550.k plus had my pool and whole landscaping redone and now I can actually feel like I'm living my dream and I dnt mind paying for it 2500 a month
I did a 30 year adjustable rate mortgage this year but I am planning on paying it off in 3-4 years before it adjusts. I had the option of a lower 15 year fixed mortgage but with the higher payments, I couldn't pay down the principle as fast.
Extra money sent to a lender gives security to the lender, not the homeowner. Plus that extra money you send to the lender, is locked inside the home. If you need that money, you can only access it by borrowing it, or selling the home. If you lose your job, you will not be able to borrow against your home. Keep the extra money OUTSIDE the home, so you have the use and access to the money. Pay your home off with a check, not by giving the banks extra money.
He literally tells people to have a big cash buffer for those scenarios. He’s not telling anyone to pay off the mortgage with every penny they have
FYI, I have State Farm homeowners insurance and auto in Florida. I do a broker dive usually once a year and have never found a lower rate. Plus, a lot of insurers don't cover home and auto combos, so you end up dealing with two different companies to save a couple of bucks.
Hurricane Charley I beileve is the 2004 hurricane that hit Florida (1 of three that year along with Ivan and Frances) and drove insurance changes.
The adjustable mortgage the homebuyers are getting now are more of the 5 year arm, fixed 5 yrs and adjust in 5 yrs
"Visa and MaterCard and American Distress." Why did that make me laugh so hard!
@11:17- I’m an ins. broker in MI: one client’s home is insured for 518K w/ 125% Replacement Cost. Re-quoting other carriers, replacement cost is 680K. If his house burns-down, he’s ooo-kaaay…hopefully. Don’t want to sleep under a “hopefully” though.
2500.00 payment on a 550,000.00 house with nothing down? HOW?? HOW??
True. A $550,000 house with $0 dowm payment with taxes and insurance will far exceed $2,500/mo.
Dave n his team...Very wise n sensible suggestions n tips!🎉❤
I just agreed with Deloney for the first time ever I think... he's absolutely correct that she has created a cloud of their finances in order to justify to herself to buy a house they couldn't afford.
Would have loved more details on finances. Seems the VA has cleared them for a pretty good chunk so I'm sure they are bringing in at least said mortgage in disability.
You have always had a "Deloney" in you, just admit it!
We did the increased value with insurance on the house when we owned one. Good to know we did do one thing right. Lol. Can you imagine townhouses where the homeowner get the bldg insurance themselves and cannot afford to rebuild but you can but you are in a mess? Condos in NC carry the insurance on the bldg but not all townhouses get the HO policy on whole bldg. that could create big messes in the case of fires and natural disasters.
Great info here! Important to compare ARMs with fixed rate products. There’s not enough savings to take on the risk in my opinion.
What dave us talking about is simply subprime mortgage marketed in a subtle shady way ,kinda like an iron fist wrapped in a bandage
Why would anyone buy a house without getting a fixed rate in the first place. This was the problem when the market crashed in 2007 because everyone was buying homes with adjusting rates. The rate goes up, and they can't afford their home and end up foreclosed on their home. Please, people listen to Dave Ramsey his always tells the truth, and he gets me out a lot of mess . I almost finish paying my house off because my wife and I are a good teammates. Every extra money we get we put it toward the principal of our mortgage loan
Would you do an adjustable rate when rates are at a record low (2.75% rate) or at a 40 year high (7.75%)?
Neither. Have you been listening? Don’t get adjustable rate
When the fixed rate was 6.5%, the ARM offered by a local bank was 4% for 2 years, could adjust (up or down) no more than 2% every 2 years thereafter while not being able to surpass 10%. Also, if the VA is clearing their 100k increase its a pretty safe bet they got disability checks coming in equal if not more to the mortgage.
The 10.25% on our Adjustable Rate Mortgage really motivated us to pay this house off early.
Wish we had such long term fixed loans. The most you can get in Australia is 5 years and the Banks highly dissuade you from that, suggesting 2-3 years max.
Need some tips...... I have 6k in my savings account. I have 3 Credit cards and owe a total of $4,700,im paying 0 interest until July 2024. I also have a car loan which I owe $5,460(4%).... I was thinking of leaving $1,000 in my savings account and using the 5k to pay off my credit cards. After I pay those off I was going to use the money I used to pay my credit cards,$350, and add them to the car payment. What are your thoughts???
pay off the car loan in full, then build back savings to $1000, then pay off the credit cards in full.
Do that and cut the cards up
If those credit cards have a chance that all the interest from the entire deferred period is added on than pay them off. Otherwise I would say to pay off the car loan first. Either way you are getting rid of a payment and that should moral boost you to getting rid of the other.
@urbansolis
First, I hope you write an accurate budget each month.
If the credit cards are on an introductory offer, if you don't pay them off in full by June 2024, you will be charged interest from the day you made your first purchase ... not on the current balance. And, I'm sure the interest rate is very high.
Use savings to pay off the credit cards now, in full.
Add what you were paying on the credit cards to your monthly car payment, add more if you can, pay that every month.
When the car is paid off, go back to building your savings. You could add what you were paying on your credit cards and car and deposit that total into savings each month, add more if you want. ...
Credit cards paid off, car paid off and you're building your savings. Good work!
@tamaraliscia3408 Thank you. I just checked, and the only one that had a deferred interest is my best buy CC. This is the one with the smallest amount, so I am attacking it using the snowball method. The others don't seem to have any defered nterests, based on my statements, but I will contact them tomorrow to see if they do. One of the CC was a balance transfer for 4k, which I now I owe 3k. That one is interest-free until Feb 2025. The best buy should be paid by December. The other is interest-free until May 2024. I believe I should have that one paid off by Feb. I'm just confused about how to pay off my car loan without paying a whole lot of interest. How do I send payments directly to the principal? Thanks for your reply:)
A VA loan is the absolute BEST way to go! You don't need a down payment and you don't pay PMI. If you don't have to pay a down payment, I don't know what's bad about that, especially with the way house values are going up.
Why is Dave so against no money down VA loan? They served our country they deserve to take advantage of it
It's a loan. That means it takes advantage of THEM.
Because why would you want to only put 0% down? That’s that much more interest you need to pay on it now. If you’re not in a position to put 20% down, you’re getting too big of a house or you need to save up more. I’m a veteran and the VA loan is definitely not a benefit. I am working hella OT to build up as much $ as I can before my house is done being built and I already can put 35% down on a 580k house. My goal would be 40%. This way you already have equity in your house instantly on closing.
@@whitneyfullerton4897 I'm also a Veteran and I disagree. The mortgage amount you qualify for is directly based on your income, regardless of downpayment. In each scenario, downpayment or not, if the mortgage payment does not exceed 25% of net income, why would you choose to throw money away on rent if you can instead purchase with 0% down? The logical answer is to take advantage of a VA mortgage with no PMI and no fees for disabled veterans. THIS IS A BENEFIT.
I'm a Veteran. Dave Ramsey is providing bad advice to Veterans when he speaks against VA mortgages. There is NO PMI and disabled Veterans pay NO fees. His advise tells us to instead throw money away on rent, when we could purchase a home and build equity. Dave Ramsey needs to stop spreading misinformation.
@@amireallythatgrumpy6508 Then Dave Ramsey should be consistent in his advice. That is: NO DEBT EVER, instead of recommending ANY mortgages!
The last one with the VA loan unfortunately these guys are incorrect. There is no PMI on a VA loan.
I will not be lazy to look for new coverage for my house this year thanks guy been lazy for the SAME IN TEN YEARS!!
Good to hear, tough to swallow.
ARMs can be a solid option for short term living. If your rate doesnt adjust for 3 years but youre only looking to stay in the home for a couple years, it can make a lot of sense!
I'm a Veteran. Dave Ramsey is providing bad advice to Veterans when he speaks against VA mortgages. There is NO PMI and disabled Veterans pay NO fees. His advise tells us to instead throw money away on rent, when we could purchase a home and build equity. If the mortgage does not exceed 25% of net income, why would you rent or make a 20% downpayment? Dave Ramsey needs to stop spreading misinformation.
EXACTLY 💯💯
Same here! Bought my house in 2020 with a 30-yr VA loan at 2.25%. No money down, no PMI. Closing costs were covered as I went with the builder's preferred lender. Paid VA loans fees and some other fees, which weren't much in the scheme of things.
Also you don’t pay property tax in some states. I think unless you managed to save up or inherit the money to buy a house without a loan, VA is a good option especially with a solid down payment and ESPECIALLY if you’re a disabled vet (the higher % the more incentives.)
How’s that going for you? Are you a millionaire I’m a veteran too
😊
I agree with not getting into debt on unnecessary items, but Ramsey will forever be wrong about credit cards. A well managed credit card will not only give you better interest rates on mortgages, but also have lots of perks (I.e airline points, cashback) which are effectively free if you pay off the balance in full and don’t incur interest.
Not that I agree w him because I pay off mines every month. He is just saying he doesn’t like credit cards because you are more likely to spend more with a credit card and he is all about saving.
The first realtor I delt with talked about fix vs variable interest rates. He said the only sane assumption for a variable is the interest will go up the max every year and top off at the cap,. Forever.
Always do a fixed you can afford and refinance when it makes sense.
I just paid the house off in April…. Now I got to save this money but the wife wants a newer house now 🤦🏾♂️
Get a newer wife? Lol jk.
Please don't do it. Enjoy life now with your paid off mortgage. Your goal now is to save and retire early.
Why would someone want a bigger house after they paid off the mortgage, unless you live in a very tiny house and you wife always wanted a bigger house.
Do you both have children? Do you have enough room for the children? If no children involved then I'm pretty sure the paid off home you both have is just fine! Hope she get her head on straight and enjoy being mortgage free!
Remodel the kitchen and make it look new.
Is Dave's rule on a mortgage being 25% of take home pay on principal + interest or principal + interest + escrow?
Adjustable rate mortgages are bad news I remember back in the 1980s when interest rates went to 18 percent so many people lost their homes and had to hand the keys to their homes back to the bank. Yes interest rates were that high back then so this isn’t something new. Three percent mortgages were unheard of for years and years and years. My parents probably had a 2 or 3 percent mortgage back in 1953. Five , six and 7 percent mortgages were normal back in the early 1990s. So I do not understand what the big surprise is at 7 and 8 percent mortgages 30 years later in 2023
The part of the insurance coverage is the Dwelling right?
you can't build a driveway with 300k, you can build a missive house for 300k just would need the land which I'm assuming isn't destroyed. I do agree with there point as a whole though with different values it makes perfect sense.
i have 3.5% fixed with MIP for the life of loan (didn't know that; thought it would fall off). should i refinance to stop the $133 payment in MIP. I am paying extra and this would go to the principal if I was able to get it off or should I just keep it? wait for it to go down... my goal is to pay off quicker and safe interest. thanks for any advice!
Call your mortgage company ask for an appraisal. If the home appraises high enough, theyll remove your PMI immediately
Wilma 2005. Always PAY EXTRA to Your Principal on YOUR Loan. MAKE a second Specific CHECK w/ a Memo on that PRINCIPAL PAYMENT!!! KEEP Records!!🕵️📝🌞🌅
Or just pay it online and put a toc in the box to apply it to the principal. Then you are credited for the payment that day. 👍
Interesting,I don't think you can fix for any longer than five years here in nz. Obviously a negative if you have a super low rate like what was on offer during covid times, but removes the massive break fees if you need to break a mortgage agreement. Mine comes up for refixing soon but will likely only fix for six months as interest rates are still forecasted to drop over the next 12 months
Interest rates are at a 40 year high. It’s quiet likely that rates will head lower sometime in the future.
I have a fixed rate mortgage. The monthly payment still goes up every year due to insurance and taxes. In fact its gone up over 100 per month each year for the last two years. An adjustable rate would be even worse.
Is there a good series ov videos or a book or two that would help me with this kind of math ?
Is it wise to consolidate the balance of a HELOC into your mortgage when renewing and make double payments or is it better to leave it as is and treat it as a separate debt?
A 30 year loan does not need to stay a 30 year loan, Just pay some extra and have a down payment that avoids PMI.
😂😂😂😂😂😂😂😂😂😂
The 2500 doesn't even include property taxes or insurance. They need to 🏃♂️ 🏃♀️ 🏃♂️ 🏃♀️ 🏃♂️ 🏃♀️
Am I the only one that wants to see what their built-in remote that Dave uses to hang up on people looks like?
It's just a button on the desk dude.
I think that the call switches to someone else to talk to them instead of them abruptly hanging up
You think wrong.Often Dave mutes the person and then discusses the call with his cohost without the caller. @@jacktattrie8970
it looks like a typical office phone but built into the desk. He probably uses it to mute people not hang up but also transfer people to one of their agents.
What does that have to do with talking about houses and mortgages?
You see, what has happening to tons of people who followed Dave’s mortgage advice are now looking at the most unaffordable housing market in history. Saving up 20% and making sure you can afford a 15 year mortgage was always a very difficult task for most Americans to pull off. If you are trying to save up $20-60k to put 20% down on a house would take years for a lot of people. If you went in with 5-10% in 2018, you would have the PMI, but you would also have a house. This is a horrible housing market for buyers and with the lack of supply, I don’t see home prices coming down anytime soon.
If you have no other debt and 2 decent incomes, you can easily make a mortgage that is 25-30% of your take home pay without issue. Dave is way too strict with his mortgage advice and that has probably cost a lot of people having been able to buy a house before the market went crazy and are likely looking at never being able to buy this decade.
My husband and I were first time home buyers in 2018… single income fam with 2 kids. we live near Austin tx and it was insane buying a house. We were outbid above asking price several times. We ended up getting a zero down loan in a 199k house. We were house poor for the first year but we survived. Now, 5 years later we have over $100k in equity because our home value has increased so much. We’re planning to move into a slightly bigger house soon bc we have 4 kids now and want another bedroom. We would’ve rented forever if we hadn’t gotten into the housing market back then! All that to say…. Advice is helpful but you still have to make decisions (and sacrifices) based on your personal situation!
When the illegals get booted out the market will open up. Breathe.
They dirty laugh, made me laugh 😂😂😂 some great advice there 👏🏽👍🏽
My Girlfriend and I bring in more together than their entire household income and we would NEVER have considered a half a million dollar home, especially at current rates. That sounds like a nightmare waiting to happen.
Exactly… our combined income is about 200k and I would only consider a purchase at a low fixed rate with 20% down. I own two rentals in California but I rent where I live. I had to work backwards to create more income to build wealth. We hope to purchase our third property at the end of 2024 with 20% down. Still waiting to buy our own but the income from the rentals is keeping us above inflation. I could never have achieved owning two rental homes in California following Dave’s recommendations. Please seek other opinions and not from realtors or lenders or those with a motive.
Hi
I need advice. I have not any loan or anything. I have coffee shop business.
Business so so because of difficult time .
I have $800k in wall st .
I like to buy house, what should I do, 100% down payment? Or mortgage? Please advise me .....🙏🙏🙏🙏🙏🙏
My son bought his first house with an FHA and 10k doen and got a PMI with that. We all assumed when he got to 20% that would drop off, NOPE!!!! He is stuck with it for the life of the loan
Yeah that’s why I prefer conventional.
The PMI goes away after you cross under 80% LTV.
I believe it only gets removed after reaching 20-22% equity if you made a 10% or more down payment. That 10k was likely less than 10% down.
It only gets removed if you refinance and you need to have about 20 percent equity
FHA 10% down you'll have to wait 10 years for PMI to drop off. 9.9% or lower you're stuck with PMI for loan term.
@@driverkpk it doesn’t drop off on its own though you have to refinance.
I had a wholesale lender try to get a loan with them to buy a house.they said I can get better interest with them . Then if I go to bank or a broker.what u think ? Is it really going to help me or them ? Long run and short term ?
Did Dave just say “American Distress” rather than American Express? Lmao!!