I was adamant that we pay cash for a house but in 2020 my wife felt like we needed to buy (even though we didn’t have all the cash). Glad I had the flexibility to budge on that point- we got into a house we love in a perfect location at a decent price. Had it paid off in 18 months. Life is totally different without debt. Feeling blessed.
I bought a house when interest rates were really low, and so far I do not regret it. My rent was constantly increasing and my mortgage is less than what I would have been paying in rent. I really dislike being in debt, but it would have taken me YEARS to save up enough to buy a house in cash, and who knows what home prices and interest rates will be by then. They may go down, but living in a house is also so much more comfortable, so I'm happy.
Paid cash for my house before my 40th birthday that was always my goal. It just hits different to come home to a paid off house or to wake up on the first and not pay rent.
@@gMcizzLeTribes that's only biannually though . 10 months you do wake up and not pay rent . Also taxes are always lower than rent , your landlord builds it into what they charge you
@@jcrowley1985 For me, it’s quarterly payments of $800 each and my home insurance is $1600/year. My monthly payment for my mortgage that covers it all and the mortgage is $1378 so about $1000 toward principal and interest. It’s not nothing, but with $100k in equity and no PMI, I won’t be rushing to pay it off as fast as Dave would.
I plan on buying a 2br/1bth duplex at some point and leverage the extra space to help pay for a mortgage. Paying cash is great and all, but if you manage your environment and balance your expenses with new income, then its possible to have a sense of both options. Purchase below your means, not at them.
Buy now. The kids would move and be settled. Either way the house would be paid off in six years. I speak as a child moved around a lot. It's very painful to be uprooted. The sooner, the better if that's your main concern. ☕🙏
My last mortgage all I kept thinking is when can I pay this off, I don't want to be up all night again having those thoughts! Saving to pay cash is 100% better! Takes longer, but its better than having sleepless nights!
Dave is correct. I paid off the mortgage March 2020 when Covid started. When they put my name on the layoff list, I slept great while everyone of my coworkers panicked.
Interesting topic, the speaker brings up valid points about the advantages and disadvantages of paying cash for a house. It's always important to weigh the pros and cons before making a big financial decision.
there is no disadvantage, pay cash for the house have no payments and be debt free, how in the world is there a disadvantage when the goal is having no payments.
Yes. I could have opted for a bigger better house with a small mortgage, but freedom was within reach. So, I decided to lower my budget to do a cash purchase and I couldn't be happier or more free. It is un-freaking-believable!
Hi. What are the steps to doing a cash purchase? Who do you pay the cash to? Or can you also get a loan from a bank and just pay the loan off with that cash. Thank you
@@pumpkin_it_slawson3588 Home purchases normally go through escrow, where a third party assists with closing the transaction. Actual cash can be paid at closing, but a check or wire transfer is safer.
@pumpkin_it_ Slawson From my experience, the seller/ builder wanted proof of funding to show the money was available prior to agreeing to the deal. Having a pre-approval from a lender helps the process, but it doesn't obligate you to borrow money. The money is typically transferred via a wire transfer at closing.
We just sent in our check to pay off our little house! Praise be unto God!!!! Thank you Jesus! You can do it too, one step at a time! Believe and Work on IT!
Such a good feeling! We paid ours off in July 2019 and that was a huge blessing in 2020 when my hospital employer kept calling me off because census was so low in April (census low due to no elective procedures we afterwards more than filled up but regardless I received no pay in May and we were ok).
I’m late to the party but I just purchased, what will likely be my forever home, in cash after selling my previous home. I’ve not told anybody because I’m so excited it may sound like I’m bragging and also I’m still shaky about seeing so much of my money leave my possession😂 I fought with the idea of buying bigger, better and just paying money down verses getting what I could afford in cash and being happy with the purchase…I’m happy🙏🏿 God is good-
I think the main issue that may have been missed is that without at least 47% down, at current interest rates, he can’t buy the home if he takes out a 15 year at 25% take home pay using back of the napkin math. I think he got the 50% number because that would be what it takes to make the numbers work.
When I moved to the area where I am now 12 years ago, I had the option of either buying a less fancy house and pay cash for it or a more fancy house and have a mortgage on it. I chose the first and I am so glad for it - no rent, no mortgage payments, low taxes, low maintenance costs, and no HOA fees. If you don’t have the huge house payments, you can probably live on a minimum wage job if a worse comes to worse type situation comes up. You shouldn’t be too afraid to be called "different".
I agree, mainly because he has good habits and buying the house will secure the housing needs for his family. That's a fundamental need, not a luxury and spending reasonably for it, even with a mortgage, is reasonable. He can afford a little leverage for this purchase.
@@KENTUCKYUSA1 Money spent on rent is not "wasted." You get needed shelter in exchange for your payment ---no different than money spent on food or electricity. Money spent on rent gives people marked ability to change their housing as their needs or desires change. It allows people to move cheaply to a new area for education or employment. The property owner may take a loss if property values decline ---you never know what's going to be happening in the months or years ahead. I suspect most people feel a lot of anxiety signing up to make 360 monthly payments when their ability to earn the income to support such payments is uncertain. I know I felt that anxiety for years.
My good friend just bought a house in a good suburb area in our city, the price was 2/3 of the market price and she paid full in cash. People often forget that a crisis is always around the corner, someone will always go bankrupt and make a quick sell. There is a house that you will afford without getting into debt, as long as you're rational & intentional.
Surely its better to buy an Appreciating asset, stop paying rent and rapidly pay off a mortgage that you can easily afford, give your family security of not having a landlord who might look to sell within those years.
I think they buy with say 25% down they can pay it off even quicker than 5-6 years. While saving they are also paying rent.natter purchase both the amount there saving and what is being paid for rent will go to paying off the mortgage.
Found your post interesting to watch. I can't wait to see your new videos soon. Good Luck with the upcoming update. This RUclips channel is very informative and effective.
they didn't account for the house they want to buy is most likely going to appreciate. I'd put that 20% down, and buy now and pay that sucker off ASAP. He's in a great place for sure.
I personally wouldn't take the mortgage out. I don't care if housing prices are going up, if they go too high I simply won't buy them or will move somewhere else. I never want to be in debt again, I can't take the stress of it anymore.
I understand that. But this guy hasn't suffered that trauma and has the good habits that will very likely allow him to avoid it. b A mortgage to secure the housing needs for his family is reasonable, in my view.
@@adamseidel9780 It's FAR easier to change housing when your circumstances change iuf you rent than if you are chained to a property because you own it. Suppose you buy a property and the next month you are out of a job? Or get offered a great job in another area? Would you rather be a renter or owner? Happens all the time, you know. There are advantages and disadvantages to both owning or renting. Which is best requires good judgement and a backup bank balance to help you over the humps.
@@SeattlePioneer he’s a nurse anesthetist with a large family, doesn’t seem like moving soon is a concern. He didn’t ask “should I buy a house,” he asked “should I wait even longer to buy a house.” Also, it’s not that much harder, you just sell it.
We have a smaller house than we would have wanted but we paid Cash for it, which was super important to me, this was in 2018, bought it for 184k, and now they are selling for 385k. 😅 However we are not planning on moving, we are super content and pay cash for everything.
This is why Dave’s advice doesn’t work anymore. time it takes to save 380 K versus 180 is huge. Purchasing home is simply not worth it anymore for a new buyers. Don’t throw your money at these overinflated houses, don’t get exploited . Index funds will have better returns the next 10 years versus these balloons
@@ds3602 or you could adapt and find a way to live where these houses are still cheap in the U.S, but nah, people feel entitled to live where houses are 400k+
While that math could be correct, it sounds like he would blow those numbers out of the water. Probably has more than 20% already, and can clearly pay it off in 6 years or less.
If you can, yes. The proper question is: "why would I want to pay interest?" Otherwise, a loan is fine, so long as you don't overbuy, get a good rate and manage your finances. Not to mention, that just because a mortgage can be cheaper than rent, that doesn't mean you should buy a house. All upgrades and repairs are on you and none of that should be financed.
I bought 200 more sq feet on a 25 year mortgage for just under what my next rent increase was going to be - right before interest rates doubled, waiting would have priced me out again for a long time
I would never wait to buy a house in cash. As you’re saving you could be paying or over paying your mortgage instead of paying rent which is just throwing money down the drain. Your income may go up but watching this in the UK, not US, house prices would be unaffordable six years later. My house in London increased in value by $300k in six years meaning had I waited to buy it in cash, I would now not be able to afford it.
Except you will lose money to interest and private mortgage insurance. A 30 year mortgage amortization schedule is usually designed where you pay most of the interest in the beginning of the loan, so you're throwing money away instead of paying down the principal. If you have enough saved to pay cash, it can save you from ending up paying double the cost of the home over the entire length of the loan. If you don't have enough to pay cash immediately, making extra payments towards your principal is the only way to not end up losing thousands in interest and fees to your lender.
Dave, I am getting to buy a house for $350,000... Yes I have the money! I am going to be a landlord as well and will provide my tenant everything included Internet, electric, water, heat/ac everything included/fully furnished (long term rental) and to only who have either a good job or good money... might decide providing a house for a college student as well.
If he buys with 20% down, then the money he was paying for rent can go towards the house payment. Sounds like that would be the best option vs throwing the rent money out of the window each month.
If you have 50% downpayment, in many places the money you put down for rent is much higher than the interest rates and property taxes. Therefor will take way longer to save for a house than to pay of a mortgage....if you think about it rent is a sort of monthly 'debt' since you cant live on the street
I bought my house for 142K, paying the same monthly payment as renting. My house is now worth 750K. That was the smartest thing I ever did. Not everybody makes HUGE amounts of money.
This is a very good mindset. I would rather do the 50% down and get the home and then pay it off in 6 years. There is no guessing on how much real estate will go up in 6 years. There could be a correction, but the fact that real estate has historically increased in value, 350K will not get you as far in 6 years as 175K and paying for a 350K home now. You would definitely have to calculate it out between the interest being accrued in the loan and what the buying power of 350K 6 years from now will be. My bet is that buying power will get significantly worse, as inflation and money printing is happening. But either way, this caller is in a great spot.
There is a reason hollywood is so enamored with action movies where the protagonist pays large sums of money in large black briefcases--it is the ultimate flex.
When Dave says the payment should be no more than 1/4 of your take home amount does he include property tax? I know that's included in most mortgages but you continue to pay that when the mortgage is paid.
Should I pay cash for a house that costs ~1/2 of my retirement fund --- or, keep paying someone else's mortgage (aka: rent)? I am 68, retired, good health, VA benefits, no debts, financially stable (unencumbered) and my annual pension is ~$65k
1. I'm 62 and relatively low income but not enough for SNAP, Medicaid, etc. 2. I have no other debts (car paid off, no credit-card or loan debt). 3. I inherited a paid-off house. 4. I have a custodial (inherited IRA) and don't want to drain it. 5. I don't have a lot of savings. 6. I could live in the inherited house for a fair amount of time using my self-employment income and IRA distributions. 7. If I didn't have HOA fees that amount of time would be much greater. 8. Would like to downsize to a non-HOA house bought with cash. Given all of the above, is there a way not to touch the IRA or savings by using the money from selling this house. If so, how, and what order of events would I have to follow to buy a house using cash that would come from the sale of my existing house?
There is no reason to put that much down on a house. I’d put 20% down and put the rest of my cash into index funds. My networth sheet will look THE SAME AS RAMSEY’S PLAN when I begin, however, ill grow my net worth significantly faster with effectively the same risk. You can sleep well at night knowing your expenses are lower. I’ll sleep well at night knowing my wealth can cover all my expenses including my mortgage.
Ohhhh Dave I’m in such a conundrum….I’m debt free and make 300k a year and I don’t know if I should buy a 800k house in cash or just put down a measly 400k
Build up a reasonable down payment & reserves & then buy responsibility & live your life. Interest, taxes, and maintenance cost are likely comparable to money loss to rent anyway.
when Dave says it's the fastest way to wealth, it is almost always not the fastest way. often it is the slowest way. and it lines the pockets of landlords too. unless houses are way underpriced, like 2012, they won't appreciate enough. put the minimum down and the balance into some investment making more than the mortgage interest rate plus or minus and fees. should you put 400k on the house or 20k and 380k in an index fund. math is rather easy.
@@amireallythatgrumpy6508 if you aren't matching inflation, you are going backwards. and the slower you go the more the chance of not keeping up with inflation. tired old analogy. the tortoise wins the race. a fable. the rabbit usually wins the race.
sorry by the time you struggle to save up enough the price just went up; mortgage is ok provided you pay monthly payments on time and pay off before retirement
Hi. What are the steps to buying a house cash? Since you don't need a lender, do you skip that part and go straight to looking for a real estate agent and start looking for homes and pay with a cashiers check...or do you still get a loan and just pay the loan off with that cash. Thank you in advance .
One simply gets an agent, finds house and the cash is transferred from your account at the appropriate time. The title company will take card ov the whole thing.
yes, you get an agent and look for a house, when you make the offer you need a letter from the bank saying you have that amount of money in your account. then on closing day you bring a certified check for the whole amount
Yeah - caller would be better off buying now, not renting and aggressively attacking the principle of their mortgage. If he did that he’d be retaining a good portion of the equity in those payments rather than throwing it away in rent. He should be now, or at least once he finds a specific house they love.
The home prices will continue to go up while he’s waiting to pay the full amount in cash. It makes more sense to do what Dave suggested. Glad he called in for advice.
@@noelaguirre1141 exactly the only issue I see wrong with his plan is that that house he's looking at may not be available. But he still would have the money saved for a house in the same price range
Can you guys please fix the red cast in the darks on the main cam (furthest to the right). This is looking quite bad and has been going on for quite some time now, is an easy fix....
He should buy the house now, so instead of wasting 100% monthly payment in rent, some of it is being wasted in interest and the rest is going back into equity for his home. And the money he's saving on the side when renting he can use that as mortgage overpayment as and when he chooses.
I am kinda thinking that you all forgetting that this guy is in rent 😅. 6 years of rent is between 216k to 144k depending on his rent. So i feel he would pay less if he gets 20 % down payment and transfer the rent amount to the mortgage and he would be done faster
During the ancient times indeed a person could be sold to slavery for not paying his debt. Even today in many countries there is no bankruptcy laws and no loan forgiveness of any kind. In some countries a person can be sentences to community service for not paying a debt. There is no law like that in America.
F no, for personal residence no. For rental absolutely yes. Once you have paid for house then you get the fever of updating and renovating carp then you will be spending more the mortgage on the house.
Started listening to Dave Ramsey in 2015 and just purchased my home 🏡 in CASH in November 2022.
I was adamant that we pay cash for a house but in 2020 my wife felt like we needed to buy (even though we didn’t have all the cash). Glad I had the flexibility to budge on that point- we got into a house we love in a perfect location at a decent price. Had it paid off in 18 months. Life is totally different without debt. Feeling blessed.
Not sure Dave should have used the phrase “You’re killing it” right after dude said he was an anesthesiologist. Lol!
Maybe he should have said: you're killing them or how many have you killed.
That's a good point 😀
Nurse Anesthetist*
LOL good pick-up!
What BEACO said! He’s a CRNA not an Anesthesiologist
I bought a house when interest rates were really low, and so far I do not regret it. My rent was constantly increasing and my mortgage is less than what I would have been paying in rent. I really dislike being in debt, but it would have taken me YEARS to save up enough to buy a house in cash, and who knows what home prices and interest rates will be by then. They may go down, but living in a house is also so much more comfortable, so I'm happy.
Fun
SAME!
Paid cash for my house before my 40th birthday that was always my goal. It just hits different to come home to a paid off house or to wake up on the first and not pay rent.
Noting this as my goal “wake up on the first and not pay rent” what a great quote.
Hits different
Still have to pay property taxes though, or the gov't will come take it away
@@gMcizzLeTribes that's only biannually though . 10 months you do wake up and not pay rent .
Also taxes are always lower than rent , your landlord builds it into what they charge you
@@jcrowley1985 For me, it’s quarterly payments of $800 each and my home insurance is $1600/year. My monthly payment for my mortgage that covers it all and the mortgage is $1378 so about $1000 toward principal and interest. It’s not nothing, but with $100k in equity and no PMI, I won’t be rushing to pay it off as fast as Dave would.
I paid cash for my house.
But it’s 400sq ft. And $23k.
In the middle of nowhere.
So blessed
do you have a dog named courage and your wifes name is muriel
@@faizanalvi3932😂😂
@@faizanalvi3932😂😂😂
@@faizanalvi3932nice one
@@faizanalvi3932😂😂😂😂
I was an Accountant before retiring and found that the people enjoying life the most have their Home paid for before retiring. Nuff Said.!!!!
I paid cash for a house at 28 years old 100% debt free and feels great. I'm now saving up to pay cash for a rental house.
Congratulations 🎉🎉 I’m thinking to do same
I plan on buying a 2br/1bth duplex at some point and leverage the extra space to help pay for a mortgage. Paying cash is great and all, but if you manage your environment and balance your expenses with new income, then its possible to have a sense of both options. Purchase below your means, not at them.
Awesome! Im 28, with a 60% deposit so far, you are an inspiration
28 * 12 * $800 (assumed dollar rent price monthly) = 268800
dont buy a 800 k house. buy a 400 k house... save up the next 10 years. then get a bigger house you want.
Or 500 k House
My wife and I bought a house in 2019. It has since appreciated by $70k. Sometimes appreciation happens faster than you can save.
This is called a bubble
@@MathiasJarlsonthis is called a NF
Funny money until you sell
Tax goes up
Appreciation - on paper; and yes - increased property taxes (funny though that they get to tax us on “appreciation on paper” eh?)
Buy now. The kids would move and be settled. Either way the house would be paid off in six years. I speak as a child moved around a lot. It's very painful to be uprooted. The sooner, the better if that's your main concern. ☕🙏
My last mortgage all I kept thinking is when can I pay this off, I don't want to be up all night again having those thoughts! Saving to pay cash is 100% better! Takes longer, but its better than having sleepless nights!
Dave is correct. I paid off the mortgage March 2020 when Covid started. When they put my name on the layoff list, I slept great while everyone of my coworkers panicked.
Interesting topic, the speaker brings up valid points about the advantages and disadvantages of paying cash for a house. It's always important to weigh the pros and cons before making a big financial decision.
there is no disadvantage, pay cash for the house have no payments and be debt free, how in the world is there a disadvantage when the goal is having no payments.
Yes. I could have opted for a bigger better house with a small mortgage, but freedom was within reach. So, I decided to lower my budget to do a cash purchase and I couldn't be happier or more free. It is un-freaking-believable!
Hi. What are the steps to doing a cash purchase? Who do you pay the cash to? Or can you also get a loan from a bank and just pay the loan off with that cash. Thank you
Following
@@pumpkin_it_slawson3588 Home purchases normally go through escrow, where a third party assists with closing the transaction. Actual cash can be paid at closing, but a check or wire transfer is safer.
@pumpkin_it_ Slawson From my experience, the seller/ builder wanted proof of funding to show the money was available prior to agreeing to the deal. Having a pre-approval from a lender helps the process, but it doesn't obligate you to borrow money. The money is typically transferred via a wire transfer at closing.
Freedom is a lie, hello property tax
1.) Make a whole bunch of money
2.) Save 90% income for 5-8 yrs
3.) Buy house in cash in full
This is a good show for people in debt, not people who have no debt
A good show for everybody. For those who have debt it's practical advice. For those that don't it's entertainment.
Americans are $12 trillion in debt, so he has an audience.
We just sent in our check to pay off our little house! Praise be unto God!!!! Thank you Jesus! You can do it too, one step at a time! Believe and Work on IT!
Congratulations!!! ❤🎉
@@smart127 Thank You and God Bless
Such a good feeling! We paid ours off in July 2019 and that was a huge blessing in 2020 when my hospital employer kept calling me off because census was so low in April (census low due to no elective procedures we afterwards more than filled up but regardless I received no pay in May and we were ok).
Awesome
I’m late to the party but I just purchased, what will likely be my forever home, in cash after selling my previous home. I’ve not told anybody because I’m so excited it may sound like I’m bragging and also I’m still shaky about seeing so much of my money leave my possession😂
I fought with the idea of buying bigger, better and just paying money down verses getting what I could afford in cash and being happy with the purchase…I’m happy🙏🏿
God is good-
I’ve been listening the program for a few years and that help me to not loose my focus and keep saving to b able to get a 15 year loan and avoid pmi
I think the main issue that may have been missed is that without at least 47% down, at current interest rates, he can’t buy the home if he takes out a 15 year at 25% take home pay using back of the napkin math. I think he got the 50% number because that would be what it takes to make the numbers work.
When I moved to the area where I am now 12 years ago, I had the option of either buying a less fancy house and pay cash for it or a more fancy house and have a mortgage on it. I chose the first and I am so glad for it - no rent, no mortgage payments, low taxes, low maintenance costs, and no HOA fees. If you don’t have the huge house payments, you can probably live on a minimum wage job if a worse comes to worse type situation comes up. You shouldn’t be too afraid to be called "different".
Clearly have a solid grip on their spending in relation to their income. Congrats!
I think he should buy the house now because it is nice to establish your children in a family home and school district.
I agree, mainly because he has good habits and buying the house will secure the housing needs for his family. That's a fundamental need, not a luxury and spending reasonably for it, even with a mortgage, is reasonable. He can afford a little leverage for this purchase.
Yes, and then he won't be wasting money on rent.
@@KENTUCKYUSA1
Money spent on rent is not "wasted." You get needed shelter in exchange for your payment ---no different than money spent on food or electricity.
Money spent on rent gives people marked ability to change their housing as their needs or desires change. It allows people to move cheaply to a new area for education or employment. The property owner may take a loss if property values decline ---you never know what's going to be happening in the months or years ahead. I suspect most people feel a lot of anxiety signing up to make 360 monthly payments when their ability to earn the income to support such payments is uncertain. I know I felt that anxiety for years.
But also he could pay the house off quickly there’s very little risk here
My good friend just bought a house in a good suburb area in our city, the price was 2/3 of the market price and she paid full in cash.
People often forget that a crisis is always around the corner, someone will always go bankrupt and make a quick sell.
There is a house that you will afford without getting into debt, as long as you're rational & intentional.
Surely its better to buy an Appreciating asset, stop paying rent and rapidly pay off a mortgage that you can easily afford, give your family security of not having a landlord who might look to sell within those years.
I really don't agree with Dave on alot of things but buying everything in cash I agree.
Dude is killing it. I'm "only" making $130k at 37.
Is that not considered good enough where you live?
@@IrisP989 It is yes. I think you misunderstand my original comment.
Iris, look at the quotation marks
Terrible lol
I think they buy with say 25% down they can pay it off even quicker than 5-6 years. While saving they are also paying rent.natter purchase both the amount there saving and what is being paid for rent will go to paying off the mortgage.
Found your post interesting to watch. I can't wait to see your new videos soon. Good Luck with the upcoming update. This RUclips channel is very informative and effective.
The family prospers in a house. Get that house asap!
Yeah, they must not be prospering without a house 👍
I will buy my house outright with cash. I'm just going to wait until prices come down.
Homes appreciate... waiting is bad
@@jayc4715 The depreciate and appreciate it is a cycle look it up
Forclosures will always exist , just stay prepared .
they didn't account for the house they want to buy is most likely going to appreciate. I'd put that 20% down, and buy now and pay that sucker off ASAP. He's in a great place for sure.
I personally wouldn't take the mortgage out. I don't care if housing prices are going up, if they go too high I simply won't buy them or will move somewhere else. I never want to be in debt again, I can't take the stress of it anymore.
I understand that. But this guy hasn't suffered that trauma and has the good habits that will very likely allow him to avoid it. b A mortgage to secure the housing needs for his family is reasonable, in my view.
So you’d rather have the stress of owning rent every month rather than owing a mortgage?
@@adamseidel9780 It's FAR easier to change housing when your circumstances change iuf you rent than if you are chained to a property because you own it.
Suppose you buy a property and the next month you are out of a job? Or get offered a great job in another area? Would you rather be a renter or owner? Happens all the time, you know.
There are advantages and disadvantages to both owning or renting. Which is best requires good judgement and a backup bank balance to help you over the humps.
@@SeattlePioneer he’s a nurse anesthetist with a large family, doesn’t seem like moving soon is a concern. He didn’t ask “should I buy a house,” he asked “should I wait even longer to buy a house.”
Also, it’s not that much harder, you just sell it.
We have a smaller house than we would have wanted but we paid Cash for it, which was super important to me, this was in 2018, bought it for 184k, and now they are selling for 385k. 😅 However we are not planning on moving, we are super content and pay cash for everything.
This is why Dave’s advice doesn’t work anymore. time it takes to save 380 K versus 180 is huge.
Purchasing home is simply not worth it anymore for a new buyers.
Don’t throw your money at these overinflated houses, don’t get exploited .
Index funds will have better returns the next 10 years versus these balloons
@@ds3602 or you could adapt and find a way to live where these houses are still cheap in the U.S, but nah, people feel entitled to live where houses are 400k+
@@urIIez $400k is really not a lot for a house tho
Love this!!!
@@urIIez why didn’t you move to those places?
Avoid debt for peace of mind and financial security.
Home is an exception to the cash only rule.
That's assuming that the home of their dreams doesn't go up in price. Buy the house with 20% and then pay it off in 10 years or less.
While that math could be correct, it sounds like he would blow those numbers out of the water. Probably has more than 20% already, and can clearly pay it off in 6 years or less.
If you can, yes. The proper question is: "why would I want to pay interest?"
Otherwise, a loan is fine, so long as you don't overbuy, get a good rate and manage your finances.
Not to mention, that just because a mortgage can be cheaper than rent, that doesn't mean you should buy a house. All upgrades and repairs are on you and none of that should be financed.
Pay cash. I did it, you save the interest, you save the cost of the mortgage, and it's amazing to be free on your own house.
You lose the leverage and you lose the spread
You can also take the money you're paying in rent and put that at a house payment
I bought 200 more sq feet on a 25 year mortgage for just under what my next rent increase was going to be - right before interest rates doubled, waiting would have priced me out again for a long time
Buying it earlier gets you a much better price too. Saving up for a downpayment while the market is going up is like chasing a train to board.
I would never wait to buy a house in cash. As you’re saving you could be paying or over paying your mortgage instead of paying rent which is just throwing money down the drain. Your income may go up but watching this in the UK, not US, house prices would be unaffordable six years later. My house in London increased in value by $300k in six years meaning had I waited to buy it in cash, I would now not be able to afford it.
Except you will lose money to interest and private mortgage insurance. A 30 year mortgage amortization schedule is usually designed where you pay most of the interest in the beginning of the loan, so you're throwing money away instead of paying down the principal. If you have enough saved to pay cash, it can save you from ending up paying double the cost of the home over the entire length of the loan. If you don't have enough to pay cash immediately, making extra payments towards your principal is the only way to not end up losing thousands in interest and fees to your lender.
Dave, I am getting to buy a house for $350,000... Yes I have the money! I am going to be a landlord as well and will provide my tenant everything included Internet, electric, water, heat/ac everything included/fully furnished (long term rental) and to only who have either a good job or good money... might decide providing a house for a college student as well.
Dude is killing it! You are only 32 (I forgot the exact age, think that is what he said) so I would save up for three more years and buy it outright.
Utah growth is exploding and prices keep spiking. He should get a mortgage now, ride the wave and pay off house soon anyways.
Personally, I don't see the need.
There is a good argument for a family to secure their need for housing when a good opportunity presents itself.
37
If he buys with 20% down, then the money he was paying for rent can go towards the house payment. Sounds like that would be the best option vs throwing the rent money out of the window each month.
If your interest payment is more than your rent payment, you're more throwing away money to a different entity.But I understand your logic.
But wouldn’t the money you’re spending on rent in addition to what you’re saving go to pay the house off faster?
That's what I was thinking. Plus every year he doesn't buy is the house going up in price.
If you have 50% downpayment, in many places the money you put down for rent is much higher than the interest rates and property taxes. Therefor will take way longer to save for a house than to pay of a mortgage....if you think about it rent is a sort of monthly 'debt' since you cant live on the street
It is certainly a great feeling, I can vouch for that. Until the property tax bill hits, and you realize you will never truly own it.
As a young adult, I surprised that you could still lose your house even if there is no mortgage. Those property taxes can be a real doozy.
I bought my house for 142K, paying the same monthly payment as renting. My house is now worth 750K. That was the smartest thing I ever did. Not everybody makes HUGE amounts of money.
but you cant sell it to get 700k and live on the street or buy a two houses instead. So its imaginary income
@@BigFishbone1I could sell it and turn around and buy a house cash with 150k left over. So, win, win.
Was the lady not listening when he said his and his wife's age the first time haha 😂😂
It happens
This is a very good mindset. I would rather do the 50% down and get the home and then pay it off in 6 years. There is no guessing on how much real estate will go up in 6 years. There could be a correction, but the fact that real estate has historically increased in value, 350K will not get you as far in 6 years as 175K and paying for a 350K home now. You would definitely have to calculate it out between the interest being accrued in the loan and what the buying power of 350K 6 years from now will be. My bet is that buying power will get significantly worse, as inflation and money printing is happening. But either way, this caller is in a great spot.
We moved several times before junior high and they were all rough.
"Way weird" What about someone who bought their first house with cash? If I can't buy with cash, I can't afford it.
If you are paying rent, thinking that’d be better served towards going to a mortgage plus the additional payments toward principal
There is a reason hollywood is so enamored with action movies where the protagonist pays large sums of money in large black briefcases--it is the ultimate flex.
When Dave says the payment should be no more than 1/4 of your take home amount does he include property tax? I know that's included in most mortgages but you continue to pay that when the mortgage is paid.
Aren't you in debt while renting, each year you sign a lease promising to pay each month for a year?
Should I pay cash for a house that costs ~1/2 of my retirement fund --- or, keep paying someone else's mortgage (aka: rent)? I am 68, retired, good health, VA benefits, no debts, financially stable (unencumbered) and my annual pension is ~$65k
1. I'm 62 and relatively low income but not enough for SNAP, Medicaid, etc.
2. I have no other debts (car paid off, no credit-card or loan debt).
3. I inherited a paid-off house.
4. I have a custodial (inherited IRA) and don't want to drain it.
5. I don't have a lot of savings.
6. I could live in the inherited house for a fair amount of time using my self-employment income and IRA distributions.
7. If I didn't have HOA fees that amount of time would be much greater.
8. Would like to downsize to a non-HOA house bought with cash.
Given all of the above, is there a way not to touch the IRA or savings by using the money from selling this house. If so, how, and what order of events would I have to follow to buy a house using cash that would come from the sale of my existing house?
There is no reason to put that much down on a house. I’d put 20% down and put the rest of my cash into index funds.
My networth sheet will look THE SAME AS RAMSEY’S PLAN when I begin, however, ill grow my net worth significantly faster with effectively the same risk.
You can sleep well at night knowing your expenses are lower.
I’ll sleep well at night knowing my wealth can cover all my expenses including my mortgage.
Ohhhh Dave I’m in such a conundrum….I’m debt free and make 300k a year and I don’t know if I should buy a 800k house in cash or just put down a measly 400k
😂😂😂😂I thought the same
Build up a reasonable down payment & reserves & then buy responsibility & live your life. Interest, taxes, and maintenance cost are likely comparable to money loss to rent anyway.
when Dave says it's the fastest way to wealth, it is almost always not the fastest way. often it is the slowest way. and it lines the pockets of landlords too.
unless houses are way underpriced, like 2012, they won't appreciate enough.
put the minimum down and the balance into some investment making more than the mortgage interest rate plus or minus and fees.
should you put 400k on the house or 20k and 380k in an index fund.
math is rather easy.
It's the slowest but the surest. It means you're always going forwards though. It stops you going backwards.
@@amireallythatgrumpy6508 if you aren't matching inflation, you are going backwards. and the slower you go the more the chance of not keeping up with inflation.
tired old analogy. the tortoise wins the race. a fable. the rabbit usually wins the race.
It's better to pay your own mortgage than your landlords if it's about the same amount
sorry by the time you struggle to save up enough the price just went up; mortgage is ok provided you pay monthly payments on time and pay off before retirement
Still paying property taxes and insurance on it but a house is the way to go it's freedom......
I tuned out after the guy said he makes $250k+ a year at 32. That puts him in the top 10% of ALL income earners in the US at 32 years old.
Together with the wife.
Wouldn't it make more sense to put up a large down payment and get a really short or low monthly payment mortgage?
20% is what you want because that is the minimum that you don't have to pay the loan insurance.
My CU is $0 down and no PMI
Unless you have VA loan, it's $0 down payment and no PMI. No VA funding fee (part of closing cost) if you're 100% disabled veteran as well.
Short answer: yes.
Provo is gorgeous
Hi. What are the steps to buying a house cash? Since you don't need a lender, do you skip that part and go straight to looking for a real estate agent and start looking for homes and pay with a cashiers check...or do you still get a loan and just pay the loan off with that cash. Thank you in advance .
One simply gets an agent, finds house and the cash is transferred from your account at the appropriate time. The title company will take card ov the whole thing.
yes, you get an agent and look for a house, when you make the offer you need a letter from the bank saying you have that amount of money in your account. then on closing day you bring a certified check for the whole amount
Agent -> Find house -> Letter from bank saying you have sufficient funds -> Wire funds to escrow company on closing day
Walk up to the front door, ring the doorbell, take out a briefcase filled with Benjamins and ask "Do we have a deal?"
@@15KHPCLUB 😂🎉underrated asf
Strange no mention of how much their rent is?
Yeah - caller would be better off buying now, not renting and aggressively attacking the principle of their mortgage. If he did that he’d be retaining a good portion of the equity in those payments rather than throwing it away in rent. He should be now, or at least once he finds a specific house they love.
i would buy it and get that equity building asap.
The home prices will continue to go up while he’s waiting to pay the full amount in cash. It makes more sense to do what Dave suggested. Glad he called in for advice.
Actually currently real estate prices are going down at a national level, so maybe beneficial for them to wait out the storm.
@@noelaguirre1141 exactly the only issue I see wrong with his plan is that that house he's looking at may not be available. But he still would have the money saved for a house in the same price range
Can you guys please fix the red cast in the darks on the main cam (furthest to the right). This is looking quite bad and has been going on for quite some time now, is an easy fix....
can you get a mortgage without a credit score??
Depends on risk tolerance. Having a mortgage and invest whats left is mathematically better long term.
wrong. this belief makes the banks rich at your expense.
Brett is very wise.
Opportunity cost of waiting vs enjoying the house at a better price.
I know exactly what happened to Dave he got his enormous ego crushed when he was 28 and now is afraid to death of banks
how long is it to pay in cash
A question I need answers to to because I want to buy a house In cash too
How can I call into your show
Pick up your phone, and dial the number.
@@jimmymcgill6778 what's the number
@@BeyondtheBinders Google it.
RUclips shadow my comments on this channel if I use numbers.
Brett has a big one for his age!
"Shovel"
Yes
115k student loan payoff is immersive.
He should buy the house now, so instead of wasting 100% monthly payment in rent, some of it is being wasted in interest and the rest is going back into equity for his home. And the money he's saving on the side when renting he can use that as mortgage overpayment as and when he chooses.
NO
I am kinda thinking that you all forgetting that this guy is in rent 😅.
6 years of rent is between 216k to 144k depending on his rent.
So i feel he would pay less if he gets 20 % down payment and transfer the rent amount to the mortgage and he would be done faster
During the ancient times indeed a person could be sold to slavery for not paying his debt. Even today in many countries there is no bankruptcy laws and no loan forgiveness of any kind. In some countries a person can be sentences to community service for not paying a debt. There is no law like that in America.
What did he say he did for a living? i couldn't understand sounded like Nurse something something.?
Nurse Anesthesiologist
F no, for personal residence no. For rental absolutely yes. Once you have paid for house then you get the fever of updating and renovating carp then you will be spending more the mortgage on the house.
Not everyone gets that fever
@@amireallythatgrumpy6508 everyone get that fever watching HGTV.
This dude makes 260k is really the game changer here. If I made 260k, I'd have a house in cash in a year.
She doesn't listen.
If jade could stop talking over Dave that would be great 😂 we don’t need a “right”….”mhm”….”yup” every five seconds as Dave is talking lol
I prefer Kristina quietly nodding.
@@rainacherienne1010 agreed
No
Pay cash. Get rid of one landlord.
It’s just crazy because that’s the exact opposite every other investor teaches
20% is more than enough. Invest the rest!