A Dave Ramsey Follower Pushes Back On His 15-Year Mortgage Rule. With Today’s Housing Prices, He Says It’s Just Not Reasonable
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A Dave Ramsey Follower Pushes Back On His 15-Year Mortgage Rule. With Today’s Housing Prices, He Says It’s Just Not Reasonable
A longtime Dave Ramsey follower is questioning one of the personal finance personality’s golden rules: the 15-year fixed mortgage. On a $67,350 salary, he asked if it was more realistic to aim for 30% of take-home pay on a mortgage instead of Ramsey’s recommended 25%. Others agreed that while the 25% rule is wise in theory, it doesn’t always line up with reality in today’s market, as some Redditors pointed out in a thread. “The math is still the math,” one commenter responded.
A longtime Dave Ramsey follower is questioning one of the personal finance personality’s golden rules: the 15-year fixed mortgage.
“I know Dave is for 15-year fixed rate mortgages, but in this day in time I find that to be unreasonable with housing prices,” the original poster wrote in a Reddit thread recently.
Even In Small Towns, Home Prices Feel Out Of Reach
The poster, who lives in a small town in South Georgia, said homes are going for $250,000 or more, with even trailers pushing into the $200,000 range. On a $67,350 salary, he asked if it was more realistic to aim for 30% of take-home pay on a mortgage instead of Ramsey’s recommended 25%.
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That seemed to touch a nerve in some Redditors.
“The math is still the math,” one commenter responded. “The rules he provides are to ensure that you waste the least amount of wealth-building potential on bank interest.”
Others agreed that while the 25% rule is wise in theory, it doesn’t always line up with reality in today’s market.
“25% is not a hard line but rather a guide,” one user shared. “They just caution you the further you go above that line, the harder it becomes to reach your financial goals.”
30-Year Mortgage Workarounds And Flexibility
Many said they opted for 30-year loans but made extra principal payments to shorten the term. One wrote, “I have a 30-year but add extra to the principal each month, which basically turns it into a 10-year.”
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Another said they refinanced from a 30-year to a 25-year, then to a 20-year, and are now on track to pay the house off in 13 years. “Not the optimal path, but it worked for us,” they added.
Some noted that financial flexibility is key. “I didn’t really pay attention to the percentage of my income because I have a budget and knew what I could afford,” one person commented.
Not Everyone Can Afford To Follow The Plan
Plenty of Redditors expressed frustration with the idea that everyone can realistically follow Ramsey’s guidelines.
Source: https://finance.yahoo.com/news/dave-ramsey-follower-pushes-back-144554305.html