Why Buying a House May Not Be For You
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- Опубликовано: 22 июл 2024
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Why Buying a House May Not Be For You
You hear all the time that renting is a waste of money. But I’m not so sure about that. So today, we’re crunching the numbers to help you decide whether renting or buying a home is right for you.
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George Kamel is a personal finance expert and co-host of The Ramsey Show. Following Ramsey’s proven money plan, George went from negative net worth to a millionaire in under 10 years. His goal is to help people spend less, save more, and avoid money traps so they can live a life with more margin, options and freedom.
This channel will simplify complex money topics, bust money myths with actual facts, and debunk the stupid financial advice you're seeing in your social media feed. All with a healthy dose of pop culture, humor, and snark.
For the record, I know the difference between principle and principal. 🤓 Our editors hadn’t had their coffee before exporting 🤣
You don’t watch the video after it’s edited?
@@7oeseven793 My man George is a busy man. That's why he has team. Would you rather him be a micromanager? That would be terrible leadership.
Your principal at school is your pal.
Holy moly there’s a lot of spammers/scammers on this comment section. Bitcoin to traders to dropping WhatsApp handles. 😂 I’ve reported about 50 comments so far, but they keep coming.
@@7oeseven793wish I had the time. My schedule is wild.
I just paid off my little home. 3 bd, 2 bathrooms, kitchen, laundry room and living room, one acre. Took us 9 yrs, 9 months and 5 days to pay it. Needs some work, but at least we have a home. ❤
🎊 👏🏼🙌🏼
Congratulations!
Wow!
As someone who just had to replace a roof, fix a heat pump, and fix a boiler all at the exact same time do not buy a house until you have the reserves.
Just wait till your car breaks at the same time too., and your pet has some type of emergency vet bill.
Facts! Those repairs tend to occur in threes 😮 I’ve lived it! Homeowner here for 15 years already.
Roof (which included extra costs from taking down and reinstalling solar panels), heat pump and furnace, and some shingles and then painting them.
You are not less of a human being just because you are renting.
I’m single and have no kids. I live in a very nice one bedroom with lots of amenities and zero responsibilities for 1200 a month. I’m out of town a lot for work. Why would I want to own a home. Everyone’s needs are different
Average rent = $1700 a month. Not supposed to spend more than 25% of take-home pay on housing. $1700/25% = $6800 a month, or $81,600 a year. Take home. Average US salary =$59,500. See the problem here?
Sadly the only answer is roommates, or living with family. I chose the latter.
That is a very old fashioned advice from the early 1990's that Dave Ramsey and all his employees are still pushing. The times are different now and real estate prices are very different.
Rent cheaper. Plenty of places for 1000/mo which is totally doable with a 58k/yr salary
JuSt WoRk HaRdEr
@@MilaN-lt2mqzoning laws passed by boomers caused housing prices to skyrocket and get they deflect the blame onto us.
Thanks George for the shout out to Elkhorn, Wisconsin. It made my daughter smile. Best place to live.
And Canton, Ohio! 😊
A big downside to home ownership , is once you move in , you find out that your nearby neighbors are problematic or a new nightmare neighbor moves next door., now you need to consider moving again and it's a big difference from ditching a rental and moving to the next town over then putting your new house up for sale and going through the hassle of selling it .
There are pros and cons with either choice. We rented for years. Honestly, that was a waste. We should have bought sooner. That said, we do like where we live now.
Plus you need to pay a real estate agent to help you sell. If you time it right, you don't pay anything when you move out of a rental, unless you want to count losing your security deposit.
True!!!
That's a fear of mine too. That's why I plan to live in the woods lol
People get really salty about how Ramsey recommends people do their finances. If you want to get a 30-year mortgage, get one. But if you aren't financially able to save $1,000 & are drowning in debt, buying a house is too advanced for you. Owning a house because of expectations or "keeping up with the Jones" shows you're not ready for home ownership. You'll end up like those people who took out huge mortgages they couldn't afford, and when the housing market collapsed along with the economy, they lost everything, including the house! I've owned a home, I've rented, I've lived in apartments, they all have their place depending on where you are in life.
yea good point.
I think a missed step is that generally you can have a smaller apartment compared to house. often people want to grow into their house, have extra room and bedrooms for having kids. If youre renting the future doesnt matter as you can just move when the time comes so you can save even more money with a smaller apartment compared to house
Consider a starter home: cabin, cottage, tiny, mobile, RV.
Rent going up is no small factor. The rent for my first apartment went up an average of 10% each year I lived there. And checking it now ten years later, it is more than double what it was in 2014. The worst part is, at the time I probably could have afforded a small starter-home - but I chose not to go that route for most of the practical reasons George lists; it simply didn't seem like the right time to do it. And now the housing market has made it financially impossible.
My rent tripled in five years.
@@ultrahighgain412 yowza! That is (not to state the obvious) even worse! Seriously, how the hell are we supposed to work towards long-term financial goals when we keep getting screwed by the people who already won the game? I'm fortunate enough that I am at least able to save money for the future, but with the way the goal posts keep moving, I can't save enough to get ahead. I honestly don't know why I'm even watching George's videos. Nothing against him (though I definitely disagree with the Ramsey org's pathological hatred of credit cards), but 99% of his advice doesn't even apply to my situation. I don't have a debt problem (seriously, the only debt I have is a car loan that will be paid off in a few months), I have an income problem. And nothing I try seems to rectify that. I just suck at getting good jobs I guess.
As a renter, I have learned to embrace my situation in this economic climate and to take advantage of it until I can own. I have fixed housing costs each month, no maintenance, no surprise repairs. I am therefore aggressively investing the difference. Although I own no home, I am able to own stocks. I have enjoyed watching my investable net worth grow each month.
This is my exact plan too!
That's the exact plan I've been following for decades. 👏 Prodigious investor and also a renter since 1986 with zero regrets. "Home ownership" isn't for everyone. My investments would only be about 1/3 of what they are today if I bought real estate early in life. I would have seriously missed out of market gains for decades.
Shoutout to the folks that edit these episodes! Every time, the clips used hit just right and are hilarious. Obviously, also some wonderful wisdom here as always from my fellow Bostonian!
I bought 11 years ago, I still wouldn't be ready to buy according to this. But I only have $100k to go on a $280k valued house...
Great video! Thank you for breaking it down like this.
Absolutely perfect timing for this video! Just accepted an offer for our apartment and now we have to decide should we buy or rent new apartment/house
Thanks for your videos, George.
With a 20% down payment and a 15 year fixed rate mortgage at 6.5%,... to keep my mortgage payment at 25% take home pay I would be looking at a $90,000 house. The median house price today in the United States is around $420,000.... but, by these rules, I can only buy up to a $90,000 house. Even if the rate was back at 3% I could only afford up to a $130,000 house to keep my payment at 25% take home pay with a 20% down payment and 15 year fix rate. I say this as someone in the middle class and who also is frugal with money. I wish 25% mortgage expense would be possible, but it's just not feasible for most people unless they are capable of putting 50% or 75% down on a house. Thoughts?
30 year is fine. Ramsey has some weird ideas. If I followed ramseys advice before I bought my first house, I'd still be waiting and missed out on my low mortgage payment and 200k in equity appreciation
I agree. Ramsey baby steps have their flaws.
Because we were putting off buying a home and saving to meet the Financial Peace guidelines, housing prices and mortgage rates shot up by the time we were “ready”. Everyone told us to hold off and wait for it to crash.
I wish I had followed Money Guys instead. They have their own version of the Baby Steps, and the way they explain housing guidelines and wealth building is more achievable while still overlapping with Ramsey on the most important things like paying off debt and increasing income
We did get into a $240,000. home for our family at 6% and 20% down, but our mortgage is a 30 year and it’s definitely over 25% monthly take home pay after property taxes. We’re heavily focused on increasing our other streams of income to be able to retire.
What is stopping you from making more money?
Keeping mortgage at 25% take home on a 15 year note would mean I'm supposed to net (Ramsey standard) $118k in my area. After taxes, insurance and 15% 401k (In this situation I'd be capped), gross income would have to be over $200k or $170k not considering insurance and 401k. If I followed Ramsey's advice to a T, I wouldn't own a home and would still be living paycheck to paycheck due to the crazy rent prices.
Yes! Thank you continuing to spread this message. Someday I’ll no longer have to defend my choice to rent. However, about the jello salads….
That cat at the keyboard gave me a much needed laugh. Thanks, George!
Why is there no conversation about the fact that both rent and mortgages are growing faster than income? Meaning the best financial decision is locking into a mortgage now, paying more than the recommended amount of your monthly income, so that you don’t find yourself in a worse situation down road?
Not necessarily. From the stats I looked at recently, housing has appreciated on average 3%. Average returns of the S&P 500 are 8% with inflation included. Despite the quickly rising housing prices it still may not be the best choice to buy now
@@rickybobby9885 you make the incorrect assumption that a house purchase is solely an investment and must generate returns beating the market.
@@JohanCody I'm not making that assumption. You said "the best financial decision is locking into a mortgage now" and I'm telling you depending on how you look at it, that isn't true at all.
@@rickybobby9885 what situation would lead to that being a poor decision?
@@JohanCody not saying its a poor decision!! I think buying a house is a great long term choice (when done correctly buying what you can afford). Just saying you would objectively receive a greater return historically with alternatives
I plan on renting until retirement. I plan on putting 15% of gross income into mutual funds and hopefully when I retire, I will have far more than the cost of a house in my retirement account and I can buy a house 100% down. BOOM!
Excellent George. Definitely one of my favorite personalities!
You don't "own" anything unless you have the deed in hand. Miss a mortgage payment and the bank will let you know who owns that house. 😅 Do what's best for you and your family. Tfs
Even then you're still just leasing the land from the tax man.
Even with a deed: miss a property tax payment and the government will show you what you own.
You will never own it unless you move to my country and buy it Dominican Republic you buy it no taxes is your es or Mexico here you will never own it period
My rent is almost 50% of the cost that the mortgage would be if I bought it. I feel and almost positive the difference invested will out pace equity. I'll just buy a house 100% cash down later 🤷🏾♂️
Agree. I am renting now and investing the difference. Returns are way better, and it's good to know I'm not giving the bank interest, but being reinvested to me
I've been following that plan for decades and it has worked out extremely well. Houses 🏘 are continually gobbling expenses; taxes, insurance, utilities, maintenance, repairs, water, sewer, gas, garbage, right down to the cost of the garden hose! 😂 Low expense ratio ETF are a much better long-term growth and maintenance-free opportunity.
Very well explained
My rent payment is $2100 whilst houses in my area start “from” $900k… I would love to buy, but it’s going to take a while to save up for a big enough down payment in order to make the payment be 25% of our take home.
I'm so grateful I bought my little house at age 21 before everything went bonkers. There are still a few things to fix up (mostly cosmetic), but I replaced the central heat/AC, water heater, and shingles, and got the standing-water issue in the basement shored up before prices skyrocketed. I can now live here forever with a fairly small mortgage payment that will eventually go away 😅
You forgot to mention the biggest con to renting: when after years of renting, your landlord sells the property and the new owner tells you that your lease will not be renewed, and you have one month to vacate the premises because the house will now be owner-occupied.
That was covered under one of Geroge's positives of renting: you can move and not make it your problem.
Just use your Emergency Fund for the Security Deposit for your next apartment and then rebuild the Emergency Fund. That isn't that complicated.
If that happens, just move. Moving is only a big deal if you're a huge consumer and have way too much stuff.
Moving is always your problem. Moving sucks.
yep, other comments saying just move. what if you cant afford anywhere thats with the area and you have to move alot further away? that affects commute times and such and your emergency fund might cover the deposit but if the monthly costs are now what you earn you arnt building that back up.
Android doesn't require another username & password. Glad you comply.
Remember everyone. If you buy a house in an HOA, you dont really "own" the house.
Exactly. HOAs should call themselves what they are: landlord who doesn't own the building.
How about property taxes in a state where it is not capped like California? You don’t really own your house either
You don’t really “own” a house whether it’s in an HOA or not. If you think otherwise, then try not paying the property taxes on it for a year and then tell the county sheriffs how you “own” that house as they literally break into it and physically remove you and everything you own from it. 😂
@@joefunk76 👍🏾
@@joefunk76 yup
Rent in Australia is ridiculous. 550 per week for three bedroom townhome in Brisbane. Don’t get me started in Sydney!💸💸💸💸
Many states have renters’ tax credits, which wasn’t mentioned.
This is where I'm at.
It's cheaper to rent.
Home mortgage in my area is $1,500 and up.
I'm currently paying ,$500/,,month to rent.
After staying in the same rental property for 10 or 15 years, my friend got eviction letter from new landlord. There were no selling sign or showing between old to new landlord. He just got a letter telling him to leave. 😢 Now he is back to considering renting or buying.
It really depends on where you live. We are renting a 3-bedroom home for $1000 per month. If we bought a 3-bedroom home, we would pay $3700 including property tax and insurance since housing is so expensive here-at least one million for a 3- bedroom home. We don"t plan to ever buy a house, unless we move out of the city.
That doesn't make sense how are you renting a million dollar home for $1000 a month??? Either you are getting a hell of a deal or you are lying.
What city is this dude?? 1000 bucks to rent a million dollar home???? Come on!!
as an extra to not renting, depending where you live and the agreement you can be responsible for repairs and maintenance. around here the landlord is only responsible for utilities maintenace like gas, water and electrical problems. so if you boiler breaks thats the landlords problem, if the plaster falls off the walls or your roof starts leaking thats YOUR problem you gotta fix, while still paying for everything else. also rental insurance costs more around here but i dont know if thats because of area charges or what not.
I wish I could get homeowners insurance for $1,500 a year, mine is around $7,500 a year
I know someone that pays $15,000 annually in property taxes on her house in Massachusetts.
George can you do a side by side comparison of buying vs renting the exact same property? Yes rent money you will never see again, but the same can be said about interest on a mortgage. And I believe most mortgages have you pay extra interest at the beginning, very little goes to principle unless You're paying extra each month. I'd also like to know how appreciation factors into the equation too, with rent you obviously have none of that. Plus the mortgage cost is fixed, rents can climb over time.
My other concern is, how much can you actually save while renting. i feel like rent hinders your ability to save quickly
I died that the toilet over and under comparison....Classic!
Here is one good thing about renting: your rent = housing costs + maintenance costs.
Just this week, the apartment above me had a water pipe that burst. I called the landlord, they quickly came and shut of the water and extracted the water.
They will be working on the damage upstairs, then they will replace my drywall.
I shutter to think how much all these repair costs will be. That being said, I know my rent will increase next year to help cover the costs of the frozen pipe from the empty apartment upstairs.
I am a low income person ($23,000 per year), there is no way I can afford housing other than renting. At least an apartment is honest about it, rather than a trailer.
I ran the numbers for my area, I MIGHT be able to pay off a 15 year mortgage on an empty lot. No house, no plumbing, no landscaping. Just and empty lot, with 25% of my income. I don't see a path to increasing my income where I ever get to stop working 16 hours a day, to double my income. I don't earn enough to save, I don't earn enough to cover debt payments. I just go further and further into debt. Driving for Lyft and Über puts wear and tear on your car, so I don't see the benefit of causing maintenance issues on a vehicle just to earn "a little bit of extra cash." It seems like you are getting paid to cover the maintenance issues that you have put on yourself by driving for Lyft and Über. In otherwords the ROI, probably isn't worth it, just like college.
Housing in my area is stupid high. But we found a 1100+ sq ft duplex for rent thats about as much as our 1 bedroom sub 800 sq ft apartment. So we are moving into that, and investing the difference for a long term plan to have a HUGE down-payment for a house years from now.
Just looked up “Doug the Pug” !!!! Pure Heaven !!! OMG !!!!! Spidey-Pug climbed the wall !!! Get’em George !!!
1 minor detail for your personal residence: although each neighborhood, and in a given year home prices may vary a bit, or anyrepairs/improvement done with your sweat equity; macrostastically, any "profit" you get at the sale of the house is only inflationary. That $100k house you bought 30 years ago, that now sells for $220k, is all inflation. Buying a house gives you a lot of your costs back, but typically is merely inflation, not truly profitable. Particularly after you account for what you paid in property taxes, there's rarely any true profit.
That may have been true in the past. Not the case in the last 5-8 years. We sold a home we live in from 2016-2022 for double what we bought it for.
Dave's principles are sound but circumstances need to be taken into account.
Thanks , I have been contemplating on either renting on the short term for a job transition and eventually buy a few years down the road once im more secure with the job opposed to saving enough money for a mortage even tho I make really good money
Great advice George !
My wife and I luckily own our home. I guess my concern is how our friends and family who rent will ever own a home. If prices continue to rise and the Fed decides to keep the rates to where mort int rates are above 6% for the next 5 years…then there will be a major affordability crisis. Forcing Americans to rent for most of their life.
That reminds me, I should check if my friend bought a house now. He was waiting for prices to go down, now they are still high and interest rates are even higher.😢
BOSS HOG gave me a good laugh😂
Renting is fine if you don’t plan to settle down in the city you’re residing in and want the freedom to move at the end of your lease. However they can raise rent gradually depending on local laws. Maintenance crew can come in your place at any time with notice, which means lack of privacy.
The reason I purchased was due to building equity and being able to control monthly costs with a fixed mortgage. Forecasting future rent is tough. However with a mortgage you can’t control property taxes (that can too go up) which can raise your monthly bill then you have to also consider repair, maintenance etc which you don’t need to with renting.
In the end there is no wrong or right way. When I was renting some of the older folks rented due to having their real-estate pay for their rental apartment bill. So they lived free. Some folks rented in nicer neighborhoods due to better schools for their kids.
Pros and cons for both. The only thing I can say is you can’t pass down a rental to your kids. Being able to pass an asset down to them will save the $$$ down the long term and in case of a major lifestyle change (job loss or retirement) you can always rent your place or rooms out to get bills paid.
I own and finally paid my house off this year and im drowning in repairs jesus christ roof water heater bust water line septic system heat pump all in one year
I know someone that had to cough up $60,000 to bring his house up to code before he was allowed to sell it in New Jersey.
@@sunnyd4734 yeap i bought my house when i was 23 for 280k paid it off in 15 years so im 38 now its worth 600k…..needs all these expensive repairs pushing 70k in repairs total but least im not paying a 4400$ mortgsge payment that what my house would cost today to buy
I can envision a future where all dwellings are owned by a handful of huge corporations and everyone save a few of the uber rich are forced to rent.
I have a 15# weighted blanket and my husband has a 20# one. Try washing those things!!! Thank goodness we have a utility sink!!!
I’m surprised you know elkhorn Wisconsin I had to replay it to make sure I heard right.
I’m renting and about to go back to renting an apartment. I’ll rather rent. My lifestyle fits better for renting at this time. I’m getting ready to start a career change and buying is not good for me and my family right now.
Seems quite expensive for folk to own property in the USA.
Until you hear aboot Canada 😂
Watching this from Elkhorn Wisconsin...
Lol time to move. It's a sign
I'm sure it's lovely.
My brother rents, but he manages roommates such that he actually nets plus 200 dollars per month.
So he gets paid to live at his place with roommates.
And he lives in a beautiful mountain town. It works for him as he is single, and this idea should really be the standard for a single person starting out. Get roommates so that you have like no rent.
OOOO I saw that principle to principal switch, sweet
I honestly don't care about equity or investments regarding buying a house. I just want something to call mine and I want control over which repairs (and how) they're done. I want complete control over who enters my home. Unfortunately my only choices where I live is to buy in a dangerous neighborhood or rent in a safe neighborhood. The rent prices are a good bit lower than buying right now. I just can't afford it without a huge down payment.
$1786+/month in rent is insane to me. I remember when rent was $600-1200 for studio, 1, & 2 bedrooms. I'm 35 fwiw
I'm 30, started renting on my own after graduating college in 2015. Paid $1200/mo from 2015-2018, $1560 2018-2022, $2100 2022-current ... All 1 bd/1ba apartments. My current apartment went up 12% when I went to renew my lease last month. This is in central PA, not like it's a big city or anything either
If I had to do it all over again, I'd buy a home as soon as possible. I'd also biy what also makes sense to rent if I want to move.
I’ve cracked up and lol’d too many times in this one (seems to be a trend with your vids). Awesome script writing and editing y’all, and George, the delivery is just 🤌 informative and entertaining. Keep it up!
George is a nice guy but I just wonder if his recommendations would have worked for him if he never left Boston, especially when you consider that he moved out relatively young. For this, I'm happy that I discovered Ramsey late. House will be paid off around the 20 year mark after rolling with the punches and kids are and have grown up in my house instead of an apartment. That 15 year/ no more than 25 percent formula does not work in some areas of this country.
I would really love to know how on earth you get to a place where having a fully funded emergency fund, 0 debt and a sizable down payment can get you more then a one bed one bath dump. Why have three kids and have been stuck unable to buy even though on paper we did it all right. And we can’t save any additional because we pay half our take home in rent which in our area(very small town) is actually currently the cheapest possible option for us. It’s incredibly discouraging given the years of work and effort to stay out of debt and safe for a down payment!
I have a house that I inherited otherwise I would not be able to own a home. However, maintenance and repairs along with land taxes are expensive. I'm not great at the upkeep and if I was renting that wouldn't be much of a problem. Also if I want to leave and stuff it's harder than just renting where I could leave if the neighborhood started getting bad or if I wanted to move for a job etc. I do like I can do whatever with my property without having to ask and house a feral cat community since I have land and they don't bother others. Later on in life I will consider if I want to move back to an apartment.
Define short term.
Also some people rent because the price they will pay for their 'dream house'(not just any house) will cost 3 times their current monthly payments (from $2k to $6k) with todays rates and cosmetic home values; while they can still afford the $6k, makes no logical sense to triple that monthly payment. So what is short term renting, I ask again?
I’m renting in a apartment would love to own land but I’m on debt so he’s right
The uncle terry wayne county lyfe clip, yes!
Very weird seeing this
The fact is, renting in my county is WAY cheaper than buying. You can rent a home for MUCH less than the payments in Northern CA
I have found that the extra costs of ownership to be worth it. Sure - my landlord is supposed to be responsible for my AC when I'm renting, but my landlord can hem and haw, delay, and hire the cheapest, most BS non-licensed clown to "repair" it while I'm still stuck paying the electric bill.
Conversely, my AC goes out and I just get it fixed, correctly, the first time and it's good for another decade.
Also - no one can tell me not to use a wall anchor for my nice paintings and the little Olympian in training in the upstairs apartment can now bother someone else.
No one can tell me that my pet snake (better than a lizard) isn't on the approved list of dogs and cats under 30 lbs with super selective breed allowances.
10:56 you can renovate if the landlord ok’s it. Being two women my mom and I are the ideal tenants. We put in new light fixtures and fans cause we hated the old ones and our landlord was happy to see us do it. Sure, we put money into something we don’t own, but we got a good deal (yay garage sales) and now we don’t have to look at the ugly fixtures anymore
I love Dave, but I hate how he is unbending on the 15 year. RIP to those who listened to Dave and saved up until they could afford a 15 year and missed out on the lower rates and lower prices. I bought my first house in 2020, 30 year, 3% rate for 225k. I put down 20% and my monthly payment was slightly less than 25% of my take home at the time. That same house now would cost 325K and 6.5% rate for a 15 year ) that is slightly less than
3K per month. So 3K per month is 25% of 144K per year. 144K after taxes is what I'd have to make and that is for a modest suburb starter home. The 15 year does give better rate, but not the flexibility and the barrier to entry is really high.
Not sure why I would want to buy(I mean I cannot afford to buy a house outright). I cannot 'buy' but I think if I try to put $ down on a home for a 10-30 year plan to own, would I not pay more because I started in a horrible time to get a house, the market is bad.
I own a house before won’t go back for that same reason renting for me period never had time for nothing I did it also the wrong way if I go back on time I would done it on my time also people always push you buy a home do it if you ready love the video he’s right 100% for me renting so much easier that don’t mean in the future I won’t buy a home even do I don’t have children but if I do it I’ll buy it cash or a giant down payment period
I really hate the 3 year house purchase rule. I am glad you gave a glimpse into comparing costs. But you need to go deeper.
You need to understand your break even point. The point at which comparing your financial state if nothing changes and your renting you would have a similar net worth. Or if you buy a house. Owning a home is way way more expensive than people think. A 1k rental doesn't compare at all to a 1k mortgage.
The three year rule is to potentially recover any money spent on buying the home. Really financially. If you sell at the 3 year mark. Your most likely financially behind. You might not be depending on factors. But.. your break even point is likely 5.. 10.. 15... or even more years. If you move before the break even point. You do it with a loss. Which means financially speaking you just threw away much of those years. It's not a complete start over. But it is a massive nuclear bomb to your finances.
My first house. When I ran the numbers. My break even point was never. Meaning that it was better off to live in apartments for the rest of my life than Owning that homem purely financially speaking. There was no possible way to catch up after I payed off the house. Not without doing something absurd like putting my entire check into saving.
It's not just about it being the right time or having enough for down payment.
I just signed for a mortgage that will be 30% of my income but I’m in the beginning of my career and will get raises every 6 months. Is this okay?
I've seen less conservative recommendations of 33%. You're fine as long as you don't have tons of other debts.
George,
This video is about buying a house but your recent video about withdrawal rate so as not to run out of money in retirement is correct FWIW. Dave needs to invest in the Humility Fund and admit his math is wrong.
The house with the outrageous price in the thumbnail would actually be a pretty decent deal in my area 😂😂😂😢😢😢
So, when you advice spending 25% of your monthly income on rent/mortgage, does that include utilities, HOA, taxes, etc?
Not utilities. But it includes principal, interest, insurance, taxes, HOA, PMI.
here in canada theres no homes under 600,000
The Taco Bell sound when talking about toilet paper 💀
Iphone And Coke...NSYNC?? UGH YUK! RAMONES!
I love all the added short vids you add to your videos. You don't just make your videos a talking head. It makes it more interesting.
i kinda wanna go off grid
Lizards are cute! But I have cats & turtles who live comfortably in a modest but affordable home
I think George might actually have an uncle Terry.
Buying can make sense, but isn’t always a good deal. I own a townhome, but am away for a few years on a work assignment. Current sale price is 700k, but market rent is 3,200. HOA, property tax and home insurance combined is over 1000 a month. Add on repairs and other expenses, I net well under 1,500 a month. That’s about a 2.5% return on my house per year, compared to 4.5% in a high yield savings account. If you had a mortgage at 8% and 20% down on our house now, just interest payments and expenses would be about 5,500 a month, compared to 3,200 a month in rent for the same place. Buying a house can make sense, but not always. Do the math and don’t feel pressured by social expectations of past generations.
I noticed at 3:50, "Principle" switches to "principal" half way through the graphic. WHAT ARE YOU SAYING GEORGE? Do I really need to involve my 8th grade principal in my finances? AGAIN? PLEASE NO
In today's housing market, the majority of American adults cannot afford to follow Dave's advice for putting at least 20% down on a 15 year fixed with total house payment no more than 25% of take home pay, unless they are putting well over 50% down. But most homeowners go outside those limitations and are doing just fine in their financial life.
I promise you they ain't investing 15%+ into retirement every month. The average person can't even come up with $1,000 without going into debt.
I have a 120 gallon "terrarium" for my bearded dragon. I just call it an enclosure lol
You know uncle Terry!!??
Haha we absolutely have a pet crested gecko, along with 3 ball pythons and a hog nose snake... and two dogs 🤷♀️
Rent is the most you will pay.
Mortgage is the least you pay.
And that is not even taking into account the opportunity cost since your money for years goes to a bank in mortgage interest before building any equity.
There are plenty of people who could easily afford to buy a house but choose to rent because the costs of ownership is usually not an effective use of capital.
I guess your Landlord is losing money
@@robocop581 That is a limited mindset. Most stores make money. Think their landlords are losing money? Not everyone's income stream is the same.
@@stevenporter863 I was being sarcastic
Lmao on these property taxes. Illinoisan here, paid 165K, taxes are 4,000
You do know that Uncle Terry is from Michigan
Property taxes…. *cries in Illinoian*
🤔 It seems there is no one size fits all here. For me the real trouble has always been keeping up with the cost of rent, it just goes up so fast I can't keep up. At this rate even if I had a piece of land I could put a house on in a few years I would be better off.
Go on welfare and you won’t have to pay anything for rent, plus earn 1000 plus per week
Writing. Like. This. Is. Fun.
Even. More. So. Since. It. Annoys. George. 😂
I purchased a home in east Tennessee for $455,000 and put down $100,000. I have a 30-year mortgage, and the payment is equal to 25% of my gross monthly income. Should I sell my house and forego the benefit of appreciation because it does not comply with Dave Ramsey's home-purchasing guidelines?
Good lord no.
If you live in Manhattan, you end up buying in a condo or co-op. Co-op boards can be tyrants. And doormen, porters and supers are expensive (as are tips). If buying in the burbs and had a choice, I'd NEVER buy in and HOA.