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Forum » Dave Ramsey's US home purchasing guidelines are out of touch.
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Thread: Dave Ramsey's US home purchasing guidelines are out of touch.

post 1660432133 04-28-2022, 09:31 PM
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Dave Ramsey's US home purchasing guidelines are out of touch.

At least for the average american..

What is Dave Ramsey's rule for buying a house?
For decades, Dave Ramsey has told radio listeners to follow the 25% rule when buying a house—remember, that means never buy a house with a monthly mortgage that's more than 25% of your monthly take-home pay on a 15 year fixed mortgage.

Average Americans earn around 56K a year making their take-home pay around 3,500$ if you live in a state with income tax.

So by his math your mortgage should be around 875$ a month.

Meanwhile in real life the average price of a home is north of 300K

So assuming you were to buy a 300K house on a 15 year fixed rate mortgage with an interest rate of 4.8% and zero money down that would make your monthly mortgage payment around 2,900$ a month with taxes/pmi. 3 times more than what Dave recommends.

So if the average American were to buy on a 15 year fixed rate mortgage they would have only around 600$ to afford all their other bills. You definitely would have to be debt free and have nothing at all goes wrong in the next 15 years or you'll likely lose it all.

What do you guys think, is the average American officially priced out of ever owning a home or are yall just all going to live in a Tuffshed?
Live & Direct from rural Iowa- GBR
post 1660432343 04-28-2022, 09:35 PM
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Dave Ramsey is out of touch. The other day he uploaded a video rant basically with the message of “inflation is high, here’s why you don’t deserve a raise.”

His baby steps are still a decent guide to get out of debt. That’s where his wisdom ends.
post 1660432363 04-28-2022, 09:36 PM
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he's not wrong about what you should do, what is possible to do is a completely different story
post 1660432433 04-28-2022, 09:38 PM
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That's a bullchit rule especially today with things the way they are. My mortgage is around 40% of my monthly income and I'm doing fine, I do have to budget now but its completely doable without going into debt and still being able to save a little each month. You should however absolutely have a large savings on hand as a home owner.

Also lol @ that 25% rule being on a 15 year. Here that would mean you would need to be pulling in 20k + a month.

Times have changed.
Journal: https://forum.obnoxiousbrutes.com/showthread.php?t=139898123&page=240
post 1660432493 04-28-2022, 09:41 PM
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I mostly agree with Dave Ramsey, but I disagree with him on credit cards. Yeah, no one ever got rich on points and cash back, but if you're someone that manages your money well, you can get benefit out of them.

Also, buying a home with no/zero credit history as he does isn't realistic or practical.
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post 1660432513 04-28-2022, 09:42 PM
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My mortgage is 18% of my take home now, but when I bought my house it was like 40%

If I had waited, I would have never been able to afford it.
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post 1660432623 04-28-2022, 09:45 PM
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I liked Dave for encouragement and ideologies for getting debt free while I was paying things off.

I do agree that you should avoid PMI by getting a down payment of 20%.

By the time I'll have $60k for 20% down on a $300k property, that same property will probably be $450k, so I'll instead need $90k, which will take me about 1 extra year to do.

I do not stand with Dave on a 15 years fixed mortgage, I believe in a 30 years fixed, and to pay it like it's 15, while having the flexibility to lower it down to the 30 years rate.
post 1660432653 04-28-2022, 09:46 PM
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I probably would not have been able to do his 25% plan on a 15 year mortgage but It did work with a 20.

But yes I think we are all one one accord, his advice is best suited for the average normie.
Live & Direct from rural Iowa- GBR
post 1660432793 04-28-2022, 09:51 PM
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Originally Posted By XterraRob⏩
I'm still waiting for the government to let the US economy reset. Praying for fast rate hikes in the near future.
Half a percent early next month.. Granted it should be a lot higher but it is a step in the right direction at least.
Live & Direct from rural Iowa- GBR
post 1660432893 04-28-2022, 09:55 PM
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The dude is a boomer to the most extreme you can take it - its easy to make stupid financial "tips" when your net worth is in the millions.

Its like when people who have jobs tell you you'll find something or to not stress it when they're already employed.

I usually do the opposite of whatever his "tips" are.
post 1660433063 04-28-2022, 10:01 PM
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I'm a big Dave Ramsey fan, even coordinated one of his Financial Peace Courses. When we were getting ready to buy a house I had the opportunity to work all the overtime I wanted, Sunday was double time. I planted a seed in the old Lady so it was time for 3 months of 12 hours a day 7 days a week, that's what Real Men do instead of complaining that the Government isn't doing anything for them.
Originally Posted By ClivesTriceps⏩
Also, buying a home with no/zero credit history as he does isn't realistic or practical.
I did it, had 20% down. They were all furious that I wasn't doing a 30 year as a first time home buyer, wanna say it was around 19 grand back in my pocket that the mortgage company and realtor did not get. Dave is unconventional and you gotta push the bankers and brokers to put that 19k in your pocket, I did it, fuk them.
Don't put that on me Ricky Bobby, don't you ever put that on me.
post 1660433103 04-28-2022, 10:02 PM
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Originally Posted By NextPound⏩
So you take out a ton of debt?
Use credit cards for every purchase?
Live above your means?
Don’t invest in retirement?

Tempted to neg for going full retard.
No, I don't have any of those issues because I didn't need a boomer to tell me how to take care of myself - I was taught that by my parents.
post 1660433203 04-28-2022, 10:06 PM
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Originally Posted By Bando⏩
I did it, had 20% down. They were all furious that I wasn't doing a 30 year as a first time home buyer, wanna say it was around 19 grand back in my pocket that the mortgage company and realtor did not get. Dave is unconventional and you gotta push the bankers and brokers to put that 19k in your pocket, I did it, fuk them.
Can you pls elaborate on this
Journal: https://forum.obnoxiousbrutes.com/showthread.php?t=139898123&page=240
post 1660433323 04-28-2022, 10:12 PM
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Originally Posted By dopamine72⏩
Can you pls elaborate on this
Mortgage Brokers and Realtors make way less on a 15 year Mortgage than a 30 year mortgage.

NEVER sign a note on a 30 year mortgage. No matter what they tell you.
Don't put that on me Ricky Bobby, don't you ever put that on me.
post 1660433343 04-28-2022, 10:14 PM
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Originally Posted By Bando⏩
Mortgage Brokers and Realtors make way less on a 15 year Mortgage than a 30 year mortgage.

NEVER sign a note on a 30 year mortgage. No matter what they tell you.
Too late bro lol
Journal: https://forum.obnoxiousbrutes.com/showthread.php?t=139898123&page=240
post 1660433553 04-28-2022, 10:30 PM
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Originally Posted By dopamine72⏩
Too late bro lol
Yeah you're in kind of a tough spot right now, but as your home rises in value you can watch interest rates and refinance to a 15 or even a ten if you got the cohonez
Don't put that on me Ricky Bobby, don't you ever put that on me.
post 1660433603 04-28-2022, 10:32 PM
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My mortgage is $1680 and I make an average of about $18,750 gross per month (not including wife’s income).

On dat dere Dave Ramsey time.
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post 1660433993 04-28-2022, 10:53 PM
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i feel like more and more people will have to wait for inheritance to buy a house.
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post 1660434453 04-28-2022, 11:15 PM
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My mortgage is only like 5% of my monthly but yeah that advice is a little ridiculous. Dave Ramsey is only good for people in really bad debt
post 1660434603 04-28-2022, 11:21 PM
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or hes right and most people will not make the cut now
post 1660434653 04-28-2022, 11:23 PM
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Originally Posted By Bando⏩
Mortgage Brokers and Realtors make way less on a 15 year Mortgage than a 30 year mortgage.

NEVER sign a note on a 30 year mortgage. No matter what they tell you.
Are you brian dead? I’ll take my 30 year mortgage at a 2.5 and invest the rest of my extra funds in the stock market and come out way ahead over the long term lmaoooo. Dave Ramsey is a cuck. Or you can just pay the 30 like a 15. Horrible advice srs
post 1660436453 04-29-2022, 12:49 AM
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Boomers have no idea what a sht show they (and their parents) have turned this country into. Don’t take any advice from them. Especially financial advice.
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post 1660439303 04-29-2022, 03:43 AM
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He is the definition of boomer. But calling him that or criticize him any way, does not bother him one bit. If you want proof of that, Google videos of him going on rants of how it doesn't bother him at all. So just take his advice and enjoy your rice and beans and make sure to buy his latest boomer books.
post 1660440343 04-29-2022, 04:36 AM
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Dave Ramsey is gay
post 1660472463 04-29-2022, 04:44 PM
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Originally Posted By AWSbruh⏩
Are you brian dead? I’ll take my 30 year mortgage at a 2.5 and invest the rest of my extra funds in the stock market and come out way ahead over the long term lmaoooo.
Or you can just pay the 30 like a 15.
You could do that, but in reality hardly no one ever does.

Dave Ramsey is not about the math, he's about how normal people actually manage their money. You are not likely to underpay your 15 year note, but if you set up a 30 and tell yourself you're just gonna pay an extra $200 a month, you might do it for a few months. After a few months your kid wants a GI Joe with the Kung Foo grip so you decide this month you're not going to pay the extra, but you'll make it up next month. Next month your Daughter wants a GI Jane and it just goes on and on, for 30 freaking years.
Don't put that on me Ricky Bobby, don't you ever put that on me.
post 1660473063 04-29-2022, 04:59 PM
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Debt free crew
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post 1660473953 04-29-2022, 05:12 PM
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Originally Posted By Azrairc⏩
he's not wrong about what you should do, what is possible to do is a completely different story
Yes he is. If you can borrow at 4% or less then borrow it for as long as you can. His advice is only good for people who are wildly irresponsible and need to have their hands held through life.
post 1660474203 04-29-2022, 05:19 PM
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If you stop going out to eat and buy a chit ton of beans and rice, you'll be successful in no time.

If you get tired of beans and rice then try rice and beans.
post 1660474273 04-29-2022, 05:21 PM
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even dave ramsey followers know hes fukcing insane when it comes to these home buying "guidelines"

oh and his referral for real estate agents is a complete rip. brb charging 33-40% per deal.

google shows the average US home price is around $392k, btw
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post 1660474403 04-29-2022, 05:25 PM
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I always LOL when people piss & moan about how hard it is to be frugal... you're all retarded tbh.
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