Dave Ramsey's Homebuying Advice: Is It Realistic?

0:00Dave Ramsey dropped some bold home buying advice on social media this week. He says, stick to houses where the monthly payment is 25% or less of your take home pay using a 15 year fixed rate mortgage. He also pushes saving for a down payment of 5% to 20%. Plus 3% to 4% for closing costs and moving expenses. Housing prices are sky high right now, averaging $534,000 last quarter, with mortgage rates over 6%. It makes 15 year loans tough since payments are way higher than on 30 year ones, especially for first time buyers scraping together even a small down payment. Folks have mixed feelings on Ramsey's take. He's all about getting debt-free fast, and if you can swing the bigger payments, you save on interest and skip private mortgage insurance with 20% down. But in this affordability crunch, it feels unrealistic for most Americans. Lower down payment options exist, like 3% for many lenders or even zero, with VA or USDA loans.

1:01Lenders often use rules like 28% of pre-tax income for housing and 36% total debt, or 35 over 45 on post-tax, bottom line. Tailor to your wallet. Maybe start with a 30 year mortgage and pay extra to build equity quicker, keeping that financial margin intact. That's the story for today. Durham News Today, Driven by AI.