![mortgage payment calculator dave ramsey mortgage payment calculator dave ramsey](https://i.pinimg.com/236x/55/e6/27/55e6279d9f6c3f09310ee60da63cc931--amortization-schedule-mortgage-calculator.jpg)
The content provided on Moneywise is information to help users become financially literate. Information and timely news from our team of trusted money specialists. “I can tell you that it is very difficult to prosper financially when you get a house payment that is north of 30% of your take home pay.” That means you don’t make enough to live in that area,” he said. He added: “You cannot tie up 40-50% of your income just because you live in an expensive area. If you want to be house poor and blame it on southern California real estate prices, it’s a reasonable blame, prices are high.”īefore looking to buy a house somewhere like San Francisco or Manhattan, Ramsey suggests you ask yourself: “Can you afford to live there?” “If you end up with a house payment that is a large percentage of your take home pay, you’re going to struggle financially,” he said. When a seemingly money-stable man named Robert called into the Ramsey Show to question the host about how to stick to his mortgage advice in pricey metropolitan markets like southern California, Ramsey said: “You don’t get a pass on math because you live in an expensive market.” You could be doing everything Ramsey suggests - be debt-free, have three to six months of expenses saved in an emergency fund and have enough saved for a 20% down payment on a home - but still struggle to afford a domicile following his 15-year fixed rate mortgage advice. Some commenters labeled the advice “unrealistic” or “nearly impossible.” This mismatch was not lost among the Redditors, many of whom acknowledged a high income was needed to follow these guidelines, or that one would need to find a home where prices are well below the national median. in 2022 (the latest Census Bureau data set) was $74,580, which would leave you with a monthly income of $6,215. Read more: No landlord? No problem! Explore hassle-free real estate investmentsĪs the Redditor’s “like, what?!” reaction suggests, that’s a huge amount of cash, especially when you consider the median household income in the U.S. With a 15-year fixed rate mortgage at 6.7% - the rate as of March 6 - you would have to make a monthly mortgage payment of around $2,823.įor those payments to be no more than 25% of your monthly take home pay, you’d need to earn at least $11,292 per month before taxes - and that doesn’t factor in additional housing costs such as property tax, home insurance and utilities. For simplicity’s sake, let’s say you buy a $400,000 home with a 20% down payment of $80,000, leaving you with a mortgage principal amount of $320,000. homes in January sold for a median price of $402,242, according to Redfin. “I just don't see that happening,” the Redditor wrote, “unless your take home is more than 20% of the home's value, or maybe if you buy a one-bedroom in the bad parts of the country.”Īre they right that Ramsey’s mortgage advice is unrealistic for most Americans - or are these risk-averse recommendations reasonable? Your monthly mortgage payment also shouldn’t exceed 25% of your take home pay. The ideal way to buy a home, according to Ramsey Solutions, the finance guru’s website, is to buy it outright in cash.īut if you’re not sitting on a mountain of money, Ramsey Solutions says the only home loan you should consider is a conventional, fixed-rate mortgage with a 15-year (or less) term.
![mortgage payment calculator dave ramsey mortgage payment calculator dave ramsey](https://ssl.cdn-redfin.com/photo/114/mbpaddedwide/894/genMid.6499894_1.jpg)
![mortgage payment calculator dave ramsey mortgage payment calculator dave ramsey](https://i.pinimg.com/originals/12/7a/74/127a748057e43a50b7098629cda21e9c.png)
Try these 5 easy money hacks to help you make and save thousands of dollars in the new year (they will only take seconds) Inflation is still white-hot - use these 3 'real assets' to protect your wealth today, no matter what the US Fed does or says.Here's how even ordinary investors can become the landlord of Walmart, Whole Foods or Kroger Commercial real estate has beaten the stock market for 25 years - but only the super rich could buy in.“Is it even possible to follow Dave Ramsey’s advice on a mortgage?” one person asked on Reddit - and their skepticism makes sense when you do the math. Radio personality Dave Ramsey has been called out online for delivering out-of-touch real estate advice to homebuyers.