How Much House Can We Afford?
VloĆŸit
- Äas pĆidĂĄn 10. 09. 2024
- đ” Create Your Free Budget! Sign up for EveryDollar âź ter.li/6h2c45
đ±Download the Ramsey Network App âź ter.li/ajeshj
đ Visit The Ramsey Store âź ter.li/7vyom2
đ Have a question for the show? Call 888-825-5225 weekdays from 2-5 pm ET or send us a message ter.li/n88ly5
Explore More Shows from Ramsey Network:
đïž The Ramsey Show âź ter.li/ng9950
đž Smart Money Happy Hour âź ter.li/9gcp3d
đ§ The Dr. John Delony Show âź ter.li/2u3mc0
đ° George Kamel âź ter.li/1elws8
đĄ The Rachel Cruze Show âź ter.li/n2u6jc
đŒ The Ken Coleman Show - Highlights âź ter.li/1rbjr2
đ EntreLeadership âź ter.li/ktxv2k
Ramsey Solutions Privacy Policy
www.ramseysolu...
Dave should open his own home construction company and build $200k 1500sq ft homes to help first time homebuyers if he truly believes 15 year mortgage is the only way to go.
Yep đ
My parents paid off a 15 year note making less than 40k a year my entire childhood. We lived very frugally but all the bills were paid.
@@butlerbees6639 and this was like 30 years ago right?
@@vamte 2000-2015
@@butlerbees6639 almost 30 years ago now
Even if he 450k down on a 700k it will still be more then 25% of his take home pay with a 15 year mortgage
It would be close given your math above.
All about choices.
With $450k I buy a $300k-$450k home and done.
I think 600k should be his max, that should at least get a bedroom for each of his kids, minus baby. Take out 150k mortgage, 450 down, 15 year. Life is good.
300k loan is roughly 25% with 15 yr 6.5% of their 150k take home. isn't it?
@@hvaball150 dunno. Dave asked what is household income and that usually means gross. Caller said 150k. So not 150k bring home.
As a random dude on the Internet, I recommend a 30 year mortgage so you can pay it off sooner but have less risk if shtf and I will pay it normal in bad times, and pay it heavy in good times. But I have the drive to stay on it.
Yup.
I call it a financial cushion.
That's what I will be doing.
@Jacob, problem is the majority do not. Along comes a baby(s), new mini-van, new roof, HVAC. In other words, life happens.
That only works if you actually pay extra. I know I refied from my 30 year to 15 year and just making the minimum payments Iâm going to save 120k in interest.
Yeah that is what I did.
Taxes, insurance, and maintenance on that $750k house is going to eat this guys $150k alive
Yes good point
People just canât live below their means
It is now essentially impossible to buy anything even "decent" with 25% of takehome pay on a 15 year mortgage.
It is possible, you would just have to save more down payment and your mortgage will decrease tremendously.
@@sarahmerriweather5942 Ya and saving for that down payment will take 10+ years for an average income household to buy an average house. Those 10 years will include rent increases and scrimping on everything. Really just better to buy as soon as one can afford to assuming the monthly mortgage payment can fit into the budget.
Weâre paying off our place next year. Under 10 years. Debt free coming soon
I can't afford a 1 bedroom apartment on 25% of my take home đ«
He makes 150k and has no mortgage payment but can only save up 20-40k per year? He should be saving up a lot more then that each year since he has no mortgage payment.
He's doing pretty good.
I made $160k a year and saved/invested more than half of salary but I don't have kids.
He has four and a new born.
Stay debt free. I am in a similar situation. Very reluctant to get back into debt
Make an extra payment each year and pay a little extra each month. What I'm doing on my 30 year.
What if people start asking questions like: How much house do we really need instead of how much can we afford? The same with cars etc⊠Then you all could eat something else than rice and beans(Unless you just LOVE rice and beans offcourse)
Amen brother. I don't know why everybody tries to be bursting at the seams.
I agree. However, having grown up in a Central American family, I do love me some rice & beans (especially cooked with a little coconut milk).
They should get all that and then ask âhow much Wife can I affordâ..
What if boomers left a better situation than they inherited instead of making everything worse?
It is better to not spend so much in unnecessary luxuries and put your money to work
Ramsey out of touch with reality with this 15 year mortgage meme.
You can always do 30 year and pay it off quickly. That's what many people do.
... until you don't pay it off quickly.
@@migratingduck1857 at which point then you were never paying off a 15 year one then anyway
just sign the 15 and get used to the lifestyle. If you can not afford it on a 15, you simply can't afford it; look for something else or save more.
@@migratingduck1857 i get what he is saying. there are indeed advantages to a 30 year mortgage if done right, a big if. that being able to pay more as if it was a 15 year, due to the lower monthly minimum. that said, many people will then use that lower monthly base payment as an excuse to just get a larger mortgage and not bother to paydown the 30 year in 15. and just end up with far more debt and ultimately paying more interest.
However...
If the individual in question was disciplined in paying down a 30 year in 15year and did not increase their borrowing as a result. they could also benefit from being able to drop the payment again in times of hardship. say if they were to lose their job, they can reduce the payments back down again. to ease the burden. which of course would be much harder to do on a 15 yr as the base payment is much higher. then once they are back in a job, just increase the payment again.
@@WeBeatMedicare6969
Thatâs not true. If you get a 15 Year, you will pay it off in 15 year.
If you get a 30, most likely you wonât.
150k and your looking at a house that cost $750k??? This man sounds crazy!
Why? He has $450K in cash once he sells his home. So at most he would take out a $300K mortgage.
Keeping up with the Joneses.
Boomers in disguise.
@@marcusarelius usually houses for 750k have very low property taxes too
@@GunGlutton If you want to get nit picky, then back your mortgage down to 700K to offset the "low property taxes"
How many people living in the house?
Whatever the bank approves you for go with 50% less of that
So no one would be able to afford a house? Alright.
True. When my partner and I looked into loans we got approved for 1.2 million and were making under 200s combined. Now we make nearly 300s a year later.
And u never buy a house
â@TheMrDudiness dude in nyc my family has exactly 150k gross and guess what approved 550k, we put 20 % down 30 years loan was 530k @ 2.99, monthly mortgage is 3400, not so bad
You are so right⊠I got approved from bank for 800k and I bought house at 400k. I didnât want to give my hard earned money to the bank. Making right choice about need and wantâŠ
What is wrong with committing to making double payments on a 30-year fixed mortgage instead of the 15? Theoretically, one should have that paid off in the same timeframe, right?
Itâs because of the psychological side of it. If we have the option not to pay extra, chances are we wonât. Not that it doesnât make sense on paper.
When taking on 30yr loan you get slightly higher coupon and if paying off like 15yr loan you end up paying little bit on interest but good thing with 30yr is that incase of bad days you can go back to smaller monthly payment where some can afford. Issue with 30yr is people donât always make double payment like they want to pay it off in 15yrs.
@@mrunalshah2136 If thatâs the case someone can refinance to 30 year. 15 and 30 year payment is not a massive difference per month considering you pay far less interest
Iâm just fine with my 30 year mortgage.
And youâre spending way more money on interest than if you did 15
Yep just fine with your 30 year mortgage, and just fine being middle class forever
a lot of Americans are "just fine" with being broke
30 year is fine if you pay it off early. You can do a 20 year mortgage.
30 year mortgages making banks great again
Definitely do not buy at $750k. The home price is only the first significant issue. Going from $350k to $500k is already a very good sized move up. He can pay that off in a year or two and way less upkeep and taxes. It isnât worth the huge setback the $750k house would be.
This is rough. I just dont make enough to justify paying off a home in sub 15 years. Working on my car while renting now. Stuff comes up etc lol. But working on it.
30 years is the way to go, mortgage is the cheapest money u can use with the longest time to repay
28% of gross income, including taxes, insurance, principal, interest.
Are people really getting 700k loans with a 150k annual income time to pop that bubble again soon
It will actually be Pete North of 50%
Ok, he's looking at a $500k+ house and he doesn't know how much he can afford? Seriously?
Baby boomers reborn.
Our bank only goes 20 years- if you need a 30 year- they sell it. So, each of our houses & our business buildings- weâve only taken out a 20 year note. Debt free now & paying cash on the new addition.
Maybe he should understand that constantly buying homes carriers a cost $500k-750k in home has a huge real estate agent and taxes lawyers ect. Tell the wife "No" can't afford it.
Congrats on your new baby! I think you are sure thinking about the families future. Good luck on your house search!
If your stock portfolio is down 50%, you will need a 100% return just to get back even. That Grumpy dude is going to be really upset when his retirement goes up in smoke.
Numbers donât lie, the Ramsey show doesnât take into account what would put someone in the best financial situation 40 years down the road. Their approach assume people canât be trusted and need to remove any liabilities as soon as possible. I take the approach of removing debt is good, but stopping retirement savings to tackle a 100k student loan at 2.5% would be devastating to long term finances if you were to invest that money and get a return of anything greater than 2.5%
exactly, for financially responsible people, they shouldn't listen to his advice. People who are bad at money should listen to Ramsey.
You donât think they know that? Thatâs not the point. Itâs why their class is called financial peace. Having student loans, car loans, a house payment, plus investing is just not a good idea to gain financial freedom. They have said plenty of times that itâs best to invest as early as possible if you have watched the show or read any books
@Austin what if I told you by holding loans and not paying them off sooner and investing the difference instead could result in an additional hundred of thousands of dollars in the long run.
Typical Merican mentally, every kid needs his/her own room and restroom. That's why people live stressed, 500-700k for a house? Rip off.
Idk about their own bathroom but you donât wanna shack too many of them in one rm and do what you can do with your income
Take out a thirty year mortgage then. It is not a big deal.
@Jimmy, keep that debt mindset, retire broke! Ignorance keeps doctors and lawyers rich!
@@alinatamashevich3354 Yes. Smart and rich people never get hurt or sued. Not a single hole in your theory. Excellent work detective professor!
@@alinatamashevich3354 I paid my 30 year off in 18 years.
@@Nolaman70 â I paid off $328K on 24 months. I Went absolutely nut.
@@Nolaman70 You are the exception, not the rule. Glad you understand how theft works.
Slowly work your way up. Move your way up to a big boy house. 200 300 400 500. Take the amount each home has raised over the course of two years or so and put a larger down-payment on it. Do a 30 year mortgage until it's your final home. Invest for retirement while doing all of that.
New rule..buy a home before you get a wife..and get a pre-nup..if youâre already married and donât have kids..donât get a home till you make a million $ and donât have kids yetâŠor ur gonna be broke and divorced..
Dave is right AGAIN!!!
How does he do it??
SRB
just hanging out / low ball it , if you have to/ once aging if you must then the bare minimum /
Why do you need a bigger home.. đ€ŠđŸââïž
Five kids. He said, they've outgrown the house. Which is WHY Dave & Rachel gave him the advice they did.
You clearly don't listen.
They keep having kids.
@@blackworldtraveler3711 He needs a clippy/snippy. If another kid shows up, then he needs a attorney.
Yâall judge ppl base off yâall personal incomes and thatâs crazy
Cue all the comments about Dave being out of touch from viewers who want more house than they can really afford. đ
Indeed.
I am rich but I can still see that there are not many 1000-1500 sq ft homes in the affordable price range for the average income. 95% of people would need to save for a decade for the down payment on their first house just to be able to afford the 15 year mortgage.
Sorry but Dave is out of touch on this issue. For example, the median home price in the nation is $426k. For someone putting down 20% to purchase a $426k home, 15 year fix at 6.5%, the household gross income would need to be $210k in order for the housing payment to not exceed 25% of take home pay. The reason Dave is out of touch is that he says home prices will not come down.
@@abrahamflores2566
There are over 400 homes in the Louisville area in the 1000-1500 sq ft range between at $150k-$250k.
@@Jackmama007 Wow, a double âDave is out of touchâ comment. None of what you said negates responsible spending behavior, it only attempts to rationalize the poor decisions that the public already makes every day.
15 year mortgage the best deal
Paying of 30yr in nine years was the best deal for me.
I paid off $328K in 24 months, saved me $56K in interest.đ
Kentucky' the moonshine state.
Is any body ever happy with the home their in.
I bought a $750K home with a $60K income. My payment is 60% of my take home pay. Don't matter. It will be worth of $2M when I retire. I sell and become an instant millionaire.
First
Congrats nerd
who cares?
JUST BUY RICHQUACK!