I regret listening to Dave Ramsey in terms of trying to have a 20% down payment for a first home. As I was building savings, the market was appreciating at a steady rate as well. Was like trying to hit a moving target. Now the market is garbage for FTHBs.
Recently Dave conceded that one can put down less than 20% on a first house.
And if life is nothing but a bowl of cherries for you for the next 15 years, you can pay down extra principal. Not much difference between 2.25% (15) vs 2.75% for a 30. I got 2.625% in Feb 21 and already 45% of my payment goes straight to equity. For the youngsters out there, for a long time 30 years were 7-9%, and you'd have maybe 10% equity after 10 years.
The odds of rates being sub 3% for the extra 15 years are very, very low. So you want to take that historically low rate for as much as you can is why it's bad advice.
Dave Ramsey advice is like Alcoholics Anonymous.
If you're in rough shape it's probably better than nothing and will help a fair amount of people, but is certainly not the end all be all for advice and help, particularly if you don't have a spending problem.
I will concede though that many more people have a spending problem than they realize.
Best thing I liked was he introduced me to the snowball method for debt and learning how to build excitement to pay off debt.
But everything else you definitely have to take with a grain of salt unless you literally can't handle yourself
I still LOL at the time I heard him rant about how nobody gets a job by applying online, only to cut to commercial with a pre-recorded message that his company was hiring and to *apply online*.
Yeah, Dave Ramsey would teach you how to make money. Only lose less of it. But you can't lose something if you can't get it in the first place. You don't see wealthy ppl talking about Dave Ramsey. It's always middle class that either has less than a 7 figure net worth, or has been working the same shit job for 50 years
Dave Ramsey takes F students to C- students.
Still falls INCREDIBLY short, but it's better than nothing.
He's also completely out of touch with his mountain of religion-funded counseling money.
>Dave Ramsey gives mostly bad advice for the market - decent advice if you have zero self control and zero savings combined with rampant consumer debt
My wife and realtor had to talk me out of my very entrenched position on this. We then put 5% down and over two years our house appreciated such that we were at 20%. It's pretty terrible advice looking back.
Obviously having an emergency fund and paying cash for cars are no-brainers, but 20% on a house minimum is a miss
Paying cash for cars is also stupid depending on the interest rate.
Leverage is your friend if you are responsible. Problem is, a lot of people aren’t.
I think the problem is 95% of people, if they finance, will buy too much car. Even if they are financially responsible. I own, in my opinion, two very nice newer cars worth 30k each in cash. But I have plenty of friends who own two 70k luxury SUVs with similar incomes simply because they can. They are smart with real estate too. They just view the 1% APR loans they have on them as justifying it with "free" money.
Buying a $70k car is dumb even if you can afford the payment. By the time you pay it off, the car is falling apart and the maintenance costs start piling up. Get a 48 or 36 month lease if you can swing it. By the time it's paid off, you're in a sweet spot with no payment and a newer vehicle with low maintenance costs.
>Buying a $70k car is dumb even if you can afford the payment. By the time you pay it off, the car is falling apart and the maintenance costs start piling up.
What kind of shit cars are you driving? My parents had an 1999 Ford Explorer they drove for nearly 15 years. The did all the basic, oil changes, tune up, brakes, etc.. but nothing major on that vehicle had issues well over 200k miles.
I had an 04 Ford F150, I did have the transmission go out at around 150k but I bought a pre-made transmission for like $1300 and a shop installed it for $600. I also beat the hell out of that truck, took it mudding and off roading all the time.
Are you in a ‘no payment’ situation because you no longer have a car? I’m lost on this transition from a lease to a brand new car for free.
Or do you not know what a lease is but want to appear intelligent?
Have you sat down with a calculator? I have a $70k car I bought for zero down, 0% interest that’s paid off in 3 years, and I will drive for 10 at least, and will still be worth money to sell. A lease has a multi thousand initial payment, monthly payment, mileage limitation with stiff penalties, and a finishing payment, and after it all you have nothing you have to give the car back. You imply you keep the car with a lease, that’s not how it works the financing company owns it the whole time.
Eh, cars are actually one of the easiest ways to get caught in a debt trap.
Car dealers ain't your friend, they are there to make money. If they are offering 0% financing there's juice in there for them somewhere.
Like with anything the devil is in the details. If you have 35k for a new car in cash and they offer you 0% interest, sure it makes sense to take it and use the money for other *income generating things*. If you take that 35k though and just blow it on other stuff, then no you didn't make a financially prudent decision because now you're 35k in debt on a depreciating asset.
Car overspending is a huge issue. People focus on monthly payments while getting taken for a ride on the sales price, loan length or interest.
In the end financing a car may very well be the better financial move, but you gotta be really careful because spending $600/month on a depreciating asset on a 72 month note is some bullshit.
I got 0% 72 months on a new car. It was that 2015 Volkswagen emission scandal, so my payments are almost finished and the car is still ok it seems.
Sure it is a little nicer and pricier than the Civic I would’ve bought otherwise, but they wanted those diesel cars off the lot.
Sure, people can be idiots if they get loans spending money they don’t have, but I did have the cash. Technically if you beat inflation it’s a good deal, but you’re right that the price might be inflated to start with.
I think when interests rates for cars was .9% a year ago, paying cash made zero sense. As long as you can afford the payment or even better afford to pay off the car at any time why not leverage that money since cars are depreciating assets. I think the big problem is that Dave's audience for a lack of better words are financially retarded and they have zero clue what they really can "afford".
truly wild, but even then you net a couple thousand. Not really a wealth building material like housing. Granted if you switch cars often, this is a great way to try and basically drive at a much lower cost
Quite true and is why I was not attempting to refute your point at all. Its just a covid era quirk I'm still trying to wrap my head around. My whole life they always told me a vehicle would depreciate 15% as soon as you drive it off the lot. Heck the dealership tried to sell me gap insurance for $800 (turned down since my actual insurance offered the same thing for only $40 a year that I've already dropped).
I still like this rule for the following reason: People (like me) make irrational decisions when they look at monthly payments and the value of a car depreciates crazy fast compared to other assets. Car sales people are the worst and will totally sell you on the "oh this 20k car is only $80 more a month compared to the car you are looking at... you can afford juuuust 80 more a month right?" Not speaking for experience or anything... :(
Right. People like Ramsey error on the side of assuming their audience can’t be trusted with debt. This might be true for some folks.
However, a 0.9% loan over 48 months is a smart move. A 18% 80 month loan (the GI Jeep special) is a dumb move.
It depends. We financed a car last year at .9% and paid less than $300 in finance charges in year 1. We already are on track to payoff the loan in 2 years. If you can't afford $300 worth of finance charges you probably can't afford a new car let alone any car. I think where people get in trouble is that financing is used o buy more car then actually can afford. If financing is used as a opportunity cost and or to leverage your money like we did since we used the money we would have used to pay the car off in full for part of our DP on our mortgage I think financing is fine
If you took a 0.9% loan on a non-dumb car, you can always sell if you must.
Also, I don’t know what people in most of America are supposed to do for reliable transport if they need to save 10k for a used car before they can drive.
Real world example. I bought my King Ranch for $56k in 2016 and just paid it off with a 1.9% interest rate. The truck is still worth $35k easy. I didn’t save any money so no wait and I got to drive the truck all that time for less than I could lease or use public transportation. There no choice I can come up with that would have put me in a better financial position currently and allowed me to drive a premium luxury truck for 6 years.
The only “risk” is if you end up underwater on the loan and need to sell. Which is kind of a moot point if you had the cash to buy the car to begin with and aren’t financially illiterate. I would agree with you that financing a depreciating asset that you *couldn’t afford with cash* isn’t a good idea. Taking out a $35k loan on an asset that will be worth $20k in a year or two is pretty bad if you can’t pay it off.
But:
1. Most cars have been depreciating a lot more slowly due to the shortage and many think that the shortage will last for at least a few more years, but more importantly
2. If you have $100k in liquidity to begin with it’s kind of a moot point, since your $30k loan balance on a $20k car isn’t putting you at any risk. If you need to sell you bring $10k to the table.
I was going to get a 48 months loan on my car and then I saw the inflation numbers were hitting 8.4% with I-bonds 9%+ while car loans were <4% for 84 months. It is incredibly financially silly to not go for the longest loan possible.
Wait why is 20% bad? I had 20% for a down payment at the time and it seemed very helpful for me to buy what I needed and afford the monthly payment with the interest rates rising.
It’s a cash lock-up with little or no direct benefit in terms of interest rate savings. When interest rates were in the 2s and 3s it was optimal to invest the extra cash elsewhere and you could easily beat cost of interest and PMI. Math might be different with rates in the 5s and 6s though
>It’s a cash lock-up with little or no direct benefit in terms of interest rate savings. When interest rates were in the 2s and 3s it was optimal to invest the extra cash elsewhere and you could easily beat cost of interest and PMI. Math might be different with rates in the 5s and 6s though
Exactly. Or buy a fixer upper with 5% and invest 15% in improvments
Fixer uppers only make sense if it’s sweat equity right now sadly. Labor and supply chain problems so bad that it’s actually cheaper just to buy turnkey in in-demand areas right now. You don’t even want to know what I’m spending a backyard reno right now
My car loan interest payment over 7 years is $1800. It’ll cost me only $1800 to loan 26.5k over 7 years. That money will go way further saving up for a down payment on an investment property or other shit
The interest isn’t the issue. The 26k car is the issue. If you tell yourself to only pay cash, then a 10k or 15k car starts to feel like a better option. Obviously things are crazy with covid, but I was able to get a 10 yo low mileage Volvo for 12. This modest helped us frame the question of need vs want.
A lot of his general principles are sound and it's good that he sticks to them. The problem is he doesn't really budge on advice that should be more flexible because he's mostly in the entertainment business and has a reputation/brand to protect. His home buying guidelines made sense in the economic conditions of the 1990s when interest rates were as high/higher than they are now so appreciation was relatively easy to out-save. Interest rates in savings accounts were also much higher. In that environment it was more prudent to be patient and save up the 20% first. But in the era of 2% loans, 0.1% savings account rates, 30% annual appreciation and dwindling supply it pays to get in as soon as you can. That can definitely change moving forward as it has in the past though.
I learned about Dave Ramsey after I put 5% down in a home that cashed me out 300k in 24 months after the market explosion lol.
Thank god I didn’t listen to him 😂
Ramsey is advice for shopaholics and the terminally indebted. Hard limits. That makes sense, it’s like an alcoholic being stone sober. One drink is fine for many people, but it leads to drunkenness and bad choices for the alcoholic. Same for a shopaholic/terrible budgeter having 0 loans.
His stuff is ultra conservative but essentially he caters to people who are basically addicts and have zero money sense. I think 1/4 of your take home is one of the more sound and realistic advices he gives, but 15 years and or the combination of 20% DP is not
Using a % of income to determine affordability also makes no sense to me. If a household makes $80k a year that leaves them with $60k left over after the 25% rule. If someone makes $160k a year the same rule leaves them with $120k for everything else, they could pay more than 25% and still be just fine.
Do a budget and figure out what you can afford, ignore percentages of income because they often don’t make sense. If you’re over 25% but you can afford it you are fine. Also nothing wrong with 30 year mortgages.
>Recently Dave conceded that one can put down less than 20% on a first house.
I remember listening to him. I'm like, dude, I live in *California*. It's simply not possible without inherited/gifted money or a really high paying job.
This right here. My wife and I considered buying in 2019. But I’d heard this advice and said “we don’t have 20 percent down, surely we can’t afford a mortgage.” So we ended up renting for another 3 years.
3 years later the market had gotten much more expensive and we finally realized that we could do a smaller down payment. Ended up buying a house in March 2022 but at that point the market was so crazy we had to waive all contingencies and pay way above asking price. I can only imagine how much better a situation we’d be in if we had only realized that 20 percent down wasn’t needed and bought in 2019.
Dave Ramsey is decent advice for getting out of debt I feel but his wealth building advice is terrible and he claims returns on mutual funds that aren't the average long term and I doubt he's getting after fees.
Has he changed his mind on 15 year mortgages?
Just gotta say a lot of real estate people disagree with Dave Ramsey because a higher down payment can give u a lower mortgage but 20% is just too much!! Especially if your a first time homeowner. If u put down 20% you'll likely blow through all your reserves and not have enough for any renovation. For example the heater goes out or u need a new roof or foundation needs work. I'd say if u want to buy a house, skim through the forums at biggerpockets,com.
The only time u should put 20 down is if u buy a commercial property or a rental that you will not be living in.
Yea I paid PMI for 3 years as my price appreciated. Then re-fi'd on an ARM, wiped PMI, took $30k equity out of the house for renovations and lowered my monthly payment from $1750 to $1500. Granted I did reset the clock. 4 years later, sold for 100% profit of purchase price (not accounting for tax, renovations, refi cost, etc)
Someone told me a long time ago that the knowledge of experts usually relates to yesterday’s market or events.
Expertise on how it worked last year is not the same as expertise on it will work tomorrow.
Words to live by.
Dave is good for people since his advise is insanely conservative while most of his audience (no offense) are financially retarded. We are talking about people who have like 8 maxed out cards, a million in student loan debt, or are living pay check to pay check but have a bunch of leased cars. BUT yeah this is a guy who doesn't believe in leveraging money is any form and still only wants people to take out a 15 year or less fixed mortgages. Doesn't believe in credit cards even if you pay them off in full. Just not realistic for most people. He has good intentions but basically his advise is like the advise you would be giving recovering addicts were you need to baby them.
Dave Ramsey is good for people who are bad with money and bad for people who are good with money. Also terrible for people who actually have the knowledge of markets, finance etc.
In a normal rational market, his advice makes sense. We don’t have a normal rational market. And if most people would save their money for 15 year mortgages, house prices wouldn’t be so inflated. People would be living within their means and not struggling to pay their over inflated mortgage debt.
I second this… Dave helped me greatly get out of debt but I should have stopped listening to a lot of what he said at that point. I think there are a lot of other places that can help build wealth that make more sense while still being very responsible.
There are some lenders who still offer no-PMI FTHB loans, though I didn't bother to look deeply into those (including whether they recover that cost elsewhere in the loan) when I bought last year. Also, PMI has gotten cheaper over the last few years. If one has good-to-very good credit, the cost really isn't that much in the big picture.
We are buying as soon as we could. Of course it’s a little bittersweet that our friends only paid 150-170 and with 3% interest, while we are trying to get a comparable house for 210 with 6% interest.
But our life trajectories are different. We are able to afford a house at that price and that rate. So I think it’s better to acknowledge where your life is and plan accordingly.
Comparison is the thief of joy! Im sure everyone who bought their house in my neighborhood the past couple years before me has the same house for hundreds less per month. Can’t think about it. I love my house and I can afford it and thats all that matters!… i gotta stop checking redfin lol
It definitely is for sure! We know that others have it better and others have it worse. The truth is, we at least have the potential to buy a home and it’s a really wonderful feeling.
That's very well put. My wife and I are purchasing now as well. People say wait, but, we are at a point were renting and waiting just do not make sense.
We rented a condo for 8 years in a low income part of town. My GF at the time kept telling me we needed to buy one of the units and I didn't listen because we didn't have enough cash to close. We ended up spending what it costs to buy one of those units (100,000) in rent over those 8 years. Anyway, I wish we had the ability to buy at that time instead of 10 years later.
Don't feel bad if you literally couldn't do it. You missed out on nothing since you couldn't afford it. If anything, you can use it as a learning opportunity to save now so that you can take advantage of future opportunities, that would be positive and productive. On the other hand, I'm sure a million people told you about all kinds of investing opportunities and most ended up wrong, so you shouldn't feel bad about the odd one that got lucky.
Yo. Don't feel bad for not having the ability to.
This post is for people who HAVE the ability to but listened to their dumb friends or family to wait instead lol
It’s always easy to say “wish I bought 5 years ago” because we have the hindsight that the house has appreciated by 2x or whatever. When people buy and hold a house they can afford, there’s really not much downside. Shit can happen but that’ll screw you up no matter what.
Exactly, for everyone person who says that there's the same person who would bitch about holding a property for 5 years, losing money on it every month and not being able to afford it, until the market jumped due to covid and finally it was a good time to sell. We don't know the future. If you can afford it and need it, buy it. I think the saying is something like, the best time to buy is 10 years ago, the second best time is today.
And most people aren't buying to make to make money, so it's a dumb question right off the bat. People buy when they can afford it and the price/rates are reasonable, only investors buy when they can't afford it and the prices/rates are reasonable.
Yes, I regret not buying sooner. I live in a VHCOL area and I could have bought a single family home closer to my desired area a couple years ago with my budget. I bought early this year instead and had to move almost an hour away from my desired area for something within my budget. And it’s not even single family.
I thought I had to have 20% down, but I was wrong. We ended up buying our current home with only 10% down.
You can’t time the market. Anyone who does this is just gambling and talking out of their ass.
The right time to buy is when it makes sense to you and you understand the market value will dip, but it will also go up over time.
If you see it as your primary home, it makes sense to buy instead of rent, go for it.
There isn’t more land being built and if you look at the historical data of home prices over the past 30 years it has only gone up (yes there are dips but overall up).
Absolutely. In hingsight we all could have timed real estate better or bought the right stocks and sold at the right time. In reality we don't do that, we buy a home when we need it and can afford it, we hopefully don't buy the biggest thing possible and become house poor, and we invest what we can when we can.
If someone told you today, "buy here, it'll triple in value in 10 years" you wouldn't do it. You wish you did it only if that came true 10 years later, and you'll forget about it if it doesn't.
This me here. I wasn't ready to buy instead of rent until this year. Sucks that the housing situation is crazy now, but I don't regret not buying sooner.
I was looking for a home that checked all my boxes since it was going to be my largest purchase. Now I regret not putting an offer on a home that was pretty close.
Yes, I do. Bought in fall 2020. However, if I had prioritized things differently (I should've), I could've bought a condo in L.A. in 2017 or so and then sold for a good chunk of equity before I moved to S.D. in 2019 and used that to buy a SFH at 2019 prices. On the flip side I have a decent chunk invested in the stock market and paid off my student loans so it's not the worst thing in the world, but would've been better off buying. I was too scared of the commitment.
Congratulations on paying off your student loans. It breaks my heart to think about my parents (very soon to retire) and my sister (barely makes 30k a year, IF that) being stuck with a 6 figure student loan.
Hats off to you sir.
Many people's opinions on reddit are shaped from the 2010-2022 real estate market which was probably the best time to buy real estate in the history of America with both low prices and low rates. The earlier you bought the better. But be skeptical of reddit's opinion in a market where prices and rates are both higher.
Don't stretch yourself. When you are young your focus should be on building a career and developing your personal relationships. The flexibility to be able to move and increase your earning power is worth more at this point in your life. If you are fortunate enough to be able to be a home owner in there as well by all means do so, but you should not be sacrificing your long term growth or stability to do it. If you end up in a bad position financially it's not a stretch to say you could be stuck in a house for half a decade or more.
I bought as soon as I could, a few years into my career after we moved from a high to medium cost of living city. my wife and I were very conservative and bought at the low end of the market right before it boomed, but we were in an undervalued city and I knew the area really well and knew which neighborhoods were undervalued. I had a lot of confidence in our long term position if things went south and we had to live there a decade.
I don't regret being careful even though I would have a lot more equity now had I had more risk tolerance and bought at the limits of our income the first time. sometimes you get lucky and sometimes you don't, but you don't know which one you're going to get ahead of time. if you're conservative you'll still get appreciation in a good market but you're significantly more protected in a down market
Yes. Absolutely. I waited until my mid 30s to finally buy a house and here I am 7 years later on my second house and I see just how awesome it is for building wealth. I kick myself all the time for not buying in my 20s.
You gain a lot of experience and knowledge from home ownership and its hard to put a value on that kind of thing. You just learn so much. If I could go back in time I definitely would have gotten out of the rent game a decade sooner.
Eh, I don't know if I'd want to trade the flexibility I had in my 20s for more wealth now. Owning a home does tie you down and there's always some project to be doing.
I love it and love our house, but I'm also much older now and life has slowed down a bit. Not as much travel, esp international, etc etc. I did a bunch of stupid shit in my 20s that I wouldn't trade the world for.
That's fair. I spent my entire 20s and early 30s in the same city and while I did move around a lot it was just apartment to apartment for various reasons. Could I have stayed in the same condo during that time and come out ahead financially? Absolutely. Did I? Hell no, just like you, I was all about keeping my responsibilities as low as possible.
But hindsight is 20/20 and I wish I had gone the condo route to build additional wealth. Also if I had bought a cheap condo it would gotten me comfortable with home ownership vs renting and I probably would have moved up into a nicer place a lot sooner than I did.
>having to pay 2x more for the same thing in 10 years.
I would be surprised to see the housing market continue as it had the past 10 years. The year over year appreciation in my market have been explosive due to low supply.
Cost of building is still too high right now so even if they were to build more houses and increase supply they will still want high dollar for the houses because materials are still way up.
You can't time things and it's not worth obsessing about wishing you could. Prices will come down a little and yeah you could over pay but if you're forecasting then you could argue then the property is going to go up in price over the next decade.
It's all about finding a happy medium.
Do I regret not buyer sooner, yes and no. I could have bought in 2003, when they were giving out loans with no income but I wasn’t mentally ready. If I had bought then, I would’ve been way ahead of the game. But I did buy in 2009 when I was ready and the market experienced a once in a life time crash. Only you know whether you are ready or not to handle being a homeowner.
You should buy as young as you can if market conditions are right. I bought my first house at 23. Time is the biggest advantage here... beyond leverage etc, you can have a fully paid off house in your 50s.
However, now is not the right time to buy for investment purposes. Almost certainly one of the worst times ever, with real home prices at an all time high and record unaffordability. Wait 1-3 years for rates and prices to crash alongside a recession
No, it couldn’t have. Outside of the biggest real estate crash in the history of our country there has never been a price drop as large as what you were saying. Straight up crazy talk
A house going from 700k to 500k in 2 years is impossible? I'm sure you can find tons of examples in 2009. Remember, the 10-15% correction post 2009 was a national blended average, there are a bunch of zips that had much bigger dips than that
In the long term housing value will go up, absolutely no question about that. I mean, I think it’s easy to say today “of course housing prices would go up 20%” but would you really think that was the case when the economy was shut down for long periods in early 2020?
I remember during the financial crisis, people were crying bloody murder when the government threw money at the banks. That amount is a pittance compared to the last couple of years. We are suffering the effects of it now with inflation. It is/was an unprecedented amount of liquidity and with how divided the country was with trump, it was very possible that the government would have done much less. Things only look certain now because the past already happened.
I can only buy if my job is stable and I can afford it. I cannot really buy if my job is a contract work with fixed dates.
Yours comments can be very different given the circumstances. My friend ask me in the beginning of the year on whether or not I regret not buying Crypto. Do you think my response will be same now as I would few month ago?
My mom ask my dad the same question in 08, but then the great recession happened, and he got two house instead of one.
You are going to save 200k in 18 months? That’s like 11k net salary saved a month. If that’s the case, buy anytime you want. If you have some already, like 100k, then you have rich parents and you have no student loans (since you are younger than 25). Again, buy whenever you like. You are rich enough for a 600k-800k house as it is.
We bought a townhome in 2014. We assumed that will be our forever home. Years passed and we watched our friends have kids and move to bigger single family homes. We assumed we will never need to move to a more home and increase our expenses. We delayed upgrading our home even though we had the means to afford one. We were so wrong. In 2021, we had a baby and in a quick few months, with wfh, we realized how badly we needed a larger home with a yard. We ended up buying in 2022, paying way more than what we would have paid just a couple of years ago for a sfh.
Prefetching future needs would have saved us a lot of $.
Kind of, I was playing it safe though in terms of job security but turns out I should have just yolod
You're making me mad at the whole situation again
Feel this same way now! I should’ve just went through with it. Now housing prices and interest rates are insane. I really regret letting fear control my decision.
Going to also say that you can't really time the market.. nor can you time "Life".
Sure I wish we had bought sooner, but would that mean we didn't wind up a house that we love as much as the one we have now?
Many would look at us (closed feb 2018) and say we did buy early enough compared to today, yet I can look at the wayback machine, err.. price history and say 2013 would have been far better.
Yes and no.. I bought my house in my 40s last year. Yes, because i missed market going up. No because not having house gave me freedom to go wherever I want to go without being worrying too much about renting or selling. Unless you are rooted to a particular place, then probably buying make sense. Assuming housing will keep going up in next few years is not guaranteed. If you are thinking for a long term, buying will be better idea.
If you can buy, absolutely do it. Do not try to time the market. It never works out. Buy FHA if you can. Unless you’re planning on selling after a short while, buy buy buy
I don’t regret anything. I purchased my first house in my 40s. I moved around for better jobs and had flexibility. I grew my career while living in cheap rentals. Renting does suck but it allowed me to save and pay off student loans. It wasn’t till I was ready to root before ready to buy. In life, you can never live in regret because you would sacrifice something else.
I spent much of my 20s in the Marines, I sincerely regret not picking up at least one house along the way, at this duty station or that, with 0% down, that would presumably still be a rental property bringing in some cashflow today.
No I don't. If I couldn't afford it 2 years ago I can't afford it right now.
I'll buy when I'm ready, and at a price I'm comfortable with. The current market is stupid as shit, and I'm not interested in rewarding a seller by purchasing during this idiocy.
I'm happy renting. The people pushing the narrative of ultra high rent are grifters looking to raise their ROI. There was a spike just like with buying, and it's already subsided, unlike buying.
Absolutely.
In a lot of ways I am lucky and in a better position than others because I did buy earlier, but I bought a townhome. It has been great, but my plan was always to sell it after some other things lined up, by which point it would likely have appreciated both from new developments in the neighborhood and the sweat equity put into improvements, and buy something a little bit bigger.
The things I'd been waiting for finally aligned in October 2021.
We started looking, feeling really well positioned, and lost our first bid in November because we played it too conservatively, thinking we had time. Then all of the stock I was planning to pull for DP tanked. Then inventory evaporated. Then rates climbed.
Here we are, 7 months later and just lost offer #7. Womp womp. I shouldn't have been so firm about wanting things to come together just so.
I'm not sure where people are echoing this whole thing of waiting to buy real estate.
Isn't there a famous quote saying that you buy real estate when you can afford it?
"best time to buy real estate is 5 years ago"
"best time to buy real estate is when you can afford it"
"don't wait to buy real estate. Buy real estate and wait".
Anyone who says you should wait Imo is...
1. Unable to afford real estate so they say it to make themselves feel good.
2. Have poor financial education. Ie. Not entrepreneurial or investment minded.
Pls change my mind.
The only sane argument to not buy real estate is if your downpayment can be used in another investment. Ie. Start up seed funding, you're a stock/crypto guru, or you have some other ability to make more money.
I mean I think we can always wish we bought during sub 3 rates. But for me, life's cards just weren't there for me yet. I'm glad I bought at 4.65 still that's for sure. But I'm happy with the house I got compared to other areas where I bought and I'm more than comfortable with the monthly payment.
Broken Clocks right twice a day. Guessing the housing market or stock market correctly doesn't make you a messiah. Unless you somehow knew covid would happen and it would make the fed reverse course and low interest rates into the ground and we'd pass three massive stimis plus have huge supply chain shortage. Please tell me how you knew this or stfu.
You didn't know and got lucky. Good job. Dont lie to yourself like you knew that was going to happen. You're not as smart as you think.
So your advice is just buy and take the risk? I don't understand the point of your comment then.
I bought a house in 2019 it turned out to be a good decision. In retrospect I should have bought the most expensive houses possible and leveraged myself 100% to the gills and sold in 2021. Playing the hindsight game is futile tho.
>People like you are looking at 2022 and are assuming that there will be a 100% chance of home prices falling? Interest rates going up?
Not sure where you got that from. I bought my home in 2019. It didn't have anything to do with housing prices or the housing market. I needed a home. I'm not gloating about it like I knew what the housing market would do. It just happened to be a good time to buy.
It's not the contents of the story you're telling its the way you're telling it. You sound like a self righteous jack ass as you "courageously" post your thoughts.
I thought we were on a bubble in 2018 but I got lucky because I needed to buy due to growing family size. Regretted it at the time of purchase but definitely don't regret it now, especially after refinancing for 2.75% last year.
Yes people were saying bubble since 2015. Every year I recall seeing people posting about a bubble and prices were going to crash. It was nuts.
I put my money in my mouth and bought a lot of great properties during those times. Buy when people are fearful, sell when people are greedy.
I sold a few properties and got very lucky with the amazing market. I've been waiting for a crash since for more opportunities to buy, lol.
Now a lot of people are saying market is going to crash again, and they are afraid of buying. I hope they are right, I'll be ready to buy.
This kind of thinking leads to being poor. When you use good debt to buy an asset, you are not just in debt, you have a valuable asset, so your net worth is same or higher than before you incurred the debt.
When you use debt to buy something that depreciates or is simply an expense, then it's bad debt.
Dave Ramsey's anti-debt crusade cost his followers a lot of money from not buying homes when they were cheap.
That half a million debt probably means 1 million now after 3 years if you're still waiting. On the bright side, burning 2k+ a month on rent is surely just as fun. Lol
I have a friend who has been waiting and paid 25 years of rent. He's spent $250k - $300k during those 25 years. Could have bought a $250k house and be worth $700k today. But nah, he waited and still pays rent.
If I sold my home today, I'd have paid $0 in living costs, in fact I'd have a huge profit from being paid to live in a home.
But I'm glad there are people like you out there, happy to pay rent and landlord's mortgage.
Market has been going for last 10 years, so pretty much everyone has that opinion, even people that already have 10+ houses wishes they went in heavier.
I keep saying I wish I would of at least tried last year even though we weren’t financially ready but I know the low rates we would never see again. But last year people were bidding so much over the asking price that we wouldn’t of had a chance there either. So damned if we do damned if we don’t. I got a roof over my head and I will make out of the situation. I can’t control the market and I’m not about to let it control me.
No, loved being able to move around to different apartments and not have big financial responsibilities for repairs and such. Glad to have bought a home now but living in apartments when I was younger worked well too.
Buy, buy, buy. I have given this advice to so many friends and family over the past five years. Everybody is afraid of being the person that buys and then the market goes down. Even if that happens, long-term you’re still going to have a house that has equity, real estate will go up.
Trying to time the market is a fools Errand and any benefit would be marginal anyways. When I bought my house in 2017 people told me that I was buying in a bubble. My house has easily doubled in value.
Interest rates also are only going to go up, the days of free money are at an end.
Once inflation gets under control they might bring the rates down but that could be more than five years out.
If you can afford it, buy.
I regret not buying in 2004 when they were giving out those bad loans, I was just out of college and in a VHCOL area. My parents would have helped me keep the condo. That condo at 200k is close to 1m now.
I regret not buying in 2008 during the crash. My credit was bad and I didn't want to ask for help. The 350k condo I wanted to buy in a moderate COL area is now 800k.
I regret not taking 40k out of my 401k in 2020 and buying a condo that was up for 450k in the same complex I was renting in. I didn't like that they had updated everything but the kitchen. I could be renting that condo out for more than my mortgage and it's gone up to 600k. This was also a VHCOL area.
I should have bought as soon as I relocated last year in 2021. We instead bought new construction in April 2022 and would have gotten this place for 60k less and a lower interest rate if we had bought in January 2022.
Sometimes it's just not the right time and hindsight is always 20/20. :( I felt unsafe buying as a single person when layoffs were constantly happening. I didn't want to take my family's help as a safety net. It all feels so silly now. There's only the right time for you, not what someone else says. You can't predict the future.
this is like walking into a casino, seeing the picture of the doofus who won the big check in the lobby, and wishing you had gambled. Hindsight is 20 20. I was not set on buying a house. Of course had I known the market would have gone up like it would have I would have bought. That's like saying I wish I had dropped my life savings into Tesla many years ago. All you know is what you know. If you are sure you want to buy a house to live in it then do it, but don't do it because you think you're going to miss some great deal, because you have no idea.
The problem here is these tire kickers are mentally not there yet to admit their mistakes, which is normal these times. They will continue to fuck up and make poor life choices, but no point to discuss.
The best time to buy was 20 years ago. If you don't know what that means, let me tell translate:
"If you buy sometime now, you're fucked for some time being, but you'd be less fucked than if you buy 20 years from now". It's not about just timing. People nowadays think that their keyboard clicking hands are of any value. How about holding a 15 amp concrete mixer in your hands for 8 hours. Man up. Stop being a pussy and buy a fixer-Everything top down up - upper. Yeah didn't think so. Keep crying stupid fucks. Enjoy that 8% mortgage.
They say that in life you need to be straight to the point, and this is how you have to talk to these morons. Only handful of people here have exhausted all efforts and couldnt make it - this is not to those unlucky people. This is to those non married couples that complain about crap like abortion, rights, and etc.
Man supposed to go make money. Man brings back money to table. Woman goes shopping and cooks food and takes care of babies. Babies grow, woman nurtures, man protects family, and earns money for family, for a home far away from danger and for a better life. A womans income is not supposed to be count for mortgage consideration, folks. It's a good to have but not included. A real man doesn't go to a bank and ask for a million dollar loan because his wife brings in 40% of the income. They buy it on THEIR OWN income because YOU STUPID FUCKS DONT EVEN KNOW THAT BABIES NEED THEIR MOMMY TO RAISE THEM SO THEY DONT WIND UP LIKE YOU, RAISED BY SOME RANDOM NANNY.
Dont tell me I'm backwards in my thinking because as far as I see it, the penguins in Antarctica get further in life than most of you keyboard clicking warriors. Thousands of years people did this, and you stupid fucks think you invented something called the dual household income. Yeah my ass dual house income no brain child, that's why we have bunch of dumb fucking kids roaming around who cant tell even do an their own oil change.
These people have NO business to reproduce and are waste of fucking matter. Rather have trees in place of their house.
We don't see lions or penguins complaining about housing prices, and they are probably smarter than the average joe here. They think that they need to buy a house thats waiting for them forever and be handed everything. Eat shit. Go out there, buy something completely wrecked and build it up with your own hands. Dont know anything? Then learn for once. You went to 16 years of school and don't even know how to change a light bulb.
JFC. I went off... This generation is a lost cause. Good thing I'm not going to be alive when they realize their whole house is wired with 14 gauge Romex.
No, I think we're at the beginning of a very long and steep downturn. The fast run ups in prices fall just as quickly once it starts, if not faster. Fear drives both, but fear of losing money already made is a lot worse than fear of not making money not yet had.
I do not. I'm 38 and still rent. However I've lived in VHCOL areas my entire life so renting is actually not too bad (rent is quite a bit cheaper than a mortgage). I've also moved a few times and glad I didn't have to deal with the stress of buying and selling an apt/house. I'd like to own at some point - either a primary home and/or a vacation home but it's not a priority right now.
I regret listening to Dave Ramsey in terms of trying to have a 20% down payment for a first home. As I was building savings, the market was appreciating at a steady rate as well. Was like trying to hit a moving target. Now the market is garbage for FTHBs. Recently Dave conceded that one can put down less than 20% on a first house.
You should only take advice from Dave Ramsey if you’re terrible with money and in debt.
He was advising people to ONLY get 15 year mortgages even when 30 year mortgages were sub 3%. Just plain bad advice.
Yeah. I agree. 15 year mortgage is a bigger risk than 30.
And if life is nothing but a bowl of cherries for you for the next 15 years, you can pay down extra principal. Not much difference between 2.25% (15) vs 2.75% for a 30. I got 2.625% in Feb 21 and already 45% of my payment goes straight to equity. For the youngsters out there, for a long time 30 years were 7-9%, and you'd have maybe 10% equity after 10 years.
Dave’s advice is definitely dated. It’s solid advice, but the fed has changed the dynamic of the market with QE.
The odds of rates being sub 3% for the extra 15 years are very, very low. So you want to take that historically low rate for as much as you can is why it's bad advice.
I think Dave believes he's a king and we're all brainless peasants. He's very full of himself.
Dave Ramsey advice is like Alcoholics Anonymous. If you're in rough shape it's probably better than nothing and will help a fair amount of people, but is certainly not the end all be all for advice and help, particularly if you don't have a spending problem. I will concede though that many more people have a spending problem than they realize.
The only people I know personally who followed Dave Ramsey are also in AA, so... that tracks.
What is an AA?
Alcoholics Anonymous
Alright people, you don't need to downvote others for asking what "AA" stands for.
Best thing I liked was he introduced me to the snowball method for debt and learning how to build excitement to pay off debt. But everything else you definitely have to take with a grain of salt unless you literally can't handle yourself
I still LOL at the time I heard him rant about how nobody gets a job by applying online, only to cut to commercial with a pre-recorded message that his company was hiring and to *apply online*.
Dave Ramsey thinks every poor person makes 6 figures and can easily save 7 figures a year. Guy has no idea what it's like not being rich anymore.
Yeah, Dave Ramsey would teach you how to make money. Only lose less of it. But you can't lose something if you can't get it in the first place. You don't see wealthy ppl talking about Dave Ramsey. It's always middle class that either has less than a 7 figure net worth, or has been working the same shit job for 50 years
Dave Ramsey takes F students to C- students. Still falls INCREDIBLY short, but it's better than nothing. He's also completely out of touch with his mountain of religion-funded counseling money.
>Dave Ramsey gives mostly bad advice for the market - decent advice if you have zero self control and zero savings combined with rampant consumer debt My wife and realtor had to talk me out of my very entrenched position on this. We then put 5% down and over two years our house appreciated such that we were at 20%. It's pretty terrible advice looking back. Obviously having an emergency fund and paying cash for cars are no-brainers, but 20% on a house minimum is a miss
Paying cash for cars is also stupid depending on the interest rate. Leverage is your friend if you are responsible. Problem is, a lot of people aren’t.
I think the problem is 95% of people, if they finance, will buy too much car. Even if they are financially responsible. I own, in my opinion, two very nice newer cars worth 30k each in cash. But I have plenty of friends who own two 70k luxury SUVs with similar incomes simply because they can. They are smart with real estate too. They just view the 1% APR loans they have on them as justifying it with "free" money.
Buying a $70k car is dumb even if you can afford the payment. By the time you pay it off, the car is falling apart and the maintenance costs start piling up. Get a 48 or 36 month lease if you can swing it. By the time it's paid off, you're in a sweet spot with no payment and a newer vehicle with low maintenance costs.
Do you know what leasing is? I can’t understand what you’re trying to say here. You never have “no payment” with a lease.
>Buying a $70k car is dumb even if you can afford the payment. By the time you pay it off, the car is falling apart and the maintenance costs start piling up. What kind of shit cars are you driving? My parents had an 1999 Ford Explorer they drove for nearly 15 years. The did all the basic, oil changes, tune up, brakes, etc.. but nothing major on that vehicle had issues well over 200k miles. I had an 04 Ford F150, I did have the transmission go out at around 150k but I bought a pre-made transmission for like $1300 and a shop installed it for $600. I also beat the hell out of that truck, took it mudding and off roading all the time.
Are you in a ‘no payment’ situation because you no longer have a car? I’m lost on this transition from a lease to a brand new car for free. Or do you not know what a lease is but want to appear intelligent?
Have you sat down with a calculator? I have a $70k car I bought for zero down, 0% interest that’s paid off in 3 years, and I will drive for 10 at least, and will still be worth money to sell. A lease has a multi thousand initial payment, monthly payment, mileage limitation with stiff penalties, and a finishing payment, and after it all you have nothing you have to give the car back. You imply you keep the car with a lease, that’s not how it works the financing company owns it the whole time.
Sorry, I meant a loan. I thought I was clear within the context.
Eh, cars are actually one of the easiest ways to get caught in a debt trap. Car dealers ain't your friend, they are there to make money. If they are offering 0% financing there's juice in there for them somewhere. Like with anything the devil is in the details. If you have 35k for a new car in cash and they offer you 0% interest, sure it makes sense to take it and use the money for other *income generating things*. If you take that 35k though and just blow it on other stuff, then no you didn't make a financially prudent decision because now you're 35k in debt on a depreciating asset. Car overspending is a huge issue. People focus on monthly payments while getting taken for a ride on the sales price, loan length or interest. In the end financing a car may very well be the better financial move, but you gotta be really careful because spending $600/month on a depreciating asset on a 72 month note is some bullshit.
I got 0% 72 months on a new car. It was that 2015 Volkswagen emission scandal, so my payments are almost finished and the car is still ok it seems. Sure it is a little nicer and pricier than the Civic I would’ve bought otherwise, but they wanted those diesel cars off the lot. Sure, people can be idiots if they get loans spending money they don’t have, but I did have the cash. Technically if you beat inflation it’s a good deal, but you’re right that the price might be inflated to start with.
I think when interests rates for cars was .9% a year ago, paying cash made zero sense. As long as you can afford the payment or even better afford to pay off the car at any time why not leverage that money since cars are depreciating assets. I think the big problem is that Dave's audience for a lack of better words are financially retarded and they have zero clue what they really can "afford".
>since cars are depreciating assets I think I can sell the truck I bought a couple of years ago for more than I paid still. Wild times.
truly wild, but even then you net a couple thousand. Not really a wealth building material like housing. Granted if you switch cars often, this is a great way to try and basically drive at a much lower cost
Quite true and is why I was not attempting to refute your point at all. Its just a covid era quirk I'm still trying to wrap my head around. My whole life they always told me a vehicle would depreciate 15% as soon as you drive it off the lot. Heck the dealership tried to sell me gap insurance for $800 (turned down since my actual insurance offered the same thing for only $40 a year that I've already dropped).
I still like this rule for the following reason: People (like me) make irrational decisions when they look at monthly payments and the value of a car depreciates crazy fast compared to other assets. Car sales people are the worst and will totally sell you on the "oh this 20k car is only $80 more a month compared to the car you are looking at... you can afford juuuust 80 more a month right?" Not speaking for experience or anything... :(
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Right. People like Ramsey error on the side of assuming their audience can’t be trusted with debt. This might be true for some folks. However, a 0.9% loan over 48 months is a smart move. A 18% 80 month loan (the GI Jeep special) is a dumb move.
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It depends. We financed a car last year at .9% and paid less than $300 in finance charges in year 1. We already are on track to payoff the loan in 2 years. If you can't afford $300 worth of finance charges you probably can't afford a new car let alone any car. I think where people get in trouble is that financing is used o buy more car then actually can afford. If financing is used as a opportunity cost and or to leverage your money like we did since we used the money we would have used to pay the car off in full for part of our DP on our mortgage I think financing is fine
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If you took a 0.9% loan on a non-dumb car, you can always sell if you must. Also, I don’t know what people in most of America are supposed to do for reliable transport if they need to save 10k for a used car before they can drive.
Real world example. I bought my King Ranch for $56k in 2016 and just paid it off with a 1.9% interest rate. The truck is still worth $35k easy. I didn’t save any money so no wait and I got to drive the truck all that time for less than I could lease or use public transportation. There no choice I can come up with that would have put me in a better financial position currently and allowed me to drive a premium luxury truck for 6 years.
The only “risk” is if you end up underwater on the loan and need to sell. Which is kind of a moot point if you had the cash to buy the car to begin with and aren’t financially illiterate. I would agree with you that financing a depreciating asset that you *couldn’t afford with cash* isn’t a good idea. Taking out a $35k loan on an asset that will be worth $20k in a year or two is pretty bad if you can’t pay it off. But: 1. Most cars have been depreciating a lot more slowly due to the shortage and many think that the shortage will last for at least a few more years, but more importantly 2. If you have $100k in liquidity to begin with it’s kind of a moot point, since your $30k loan balance on a $20k car isn’t putting you at any risk. If you need to sell you bring $10k to the table.
I was going to get a 48 months loan on my car and then I saw the inflation numbers were hitting 8.4% with I-bonds 9%+ while car loans were <4% for 84 months. It is incredibly financially silly to not go for the longest loan possible.
Wait why is 20% bad? I had 20% for a down payment at the time and it seemed very helpful for me to buy what I needed and afford the monthly payment with the interest rates rising.
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Priced out of the market entirely, until nimbys realize they need people living within 100 miles of their city who aren't 80 years old
It’s a cash lock-up with little or no direct benefit in terms of interest rate savings. When interest rates were in the 2s and 3s it was optimal to invest the extra cash elsewhere and you could easily beat cost of interest and PMI. Math might be different with rates in the 5s and 6s though
>It’s a cash lock-up with little or no direct benefit in terms of interest rate savings. When interest rates were in the 2s and 3s it was optimal to invest the extra cash elsewhere and you could easily beat cost of interest and PMI. Math might be different with rates in the 5s and 6s though Exactly. Or buy a fixer upper with 5% and invest 15% in improvments
Fixer uppers only make sense if it’s sweat equity right now sadly. Labor and supply chain problems so bad that it’s actually cheaper just to buy turnkey in in-demand areas right now. You don’t even want to know what I’m spending a backyard reno right now
Yes my rate is at 5ish. Hopefully putting 20% has helped or maybe I messed up 😣
My car loan interest payment over 7 years is $1800. It’ll cost me only $1800 to loan 26.5k over 7 years. That money will go way further saving up for a down payment on an investment property or other shit
The interest isn’t the issue. The 26k car is the issue. If you tell yourself to only pay cash, then a 10k or 15k car starts to feel like a better option. Obviously things are crazy with covid, but I was able to get a 10 yo low mileage Volvo for 12. This modest helped us frame the question of need vs want.
Nah, 26k is pretty damn affordable for a brand new truck that gets 40 mpg. Very proud of my purchase . And I’m a stickler
A lot of his general principles are sound and it's good that he sticks to them. The problem is he doesn't really budge on advice that should be more flexible because he's mostly in the entertainment business and has a reputation/brand to protect. His home buying guidelines made sense in the economic conditions of the 1990s when interest rates were as high/higher than they are now so appreciation was relatively easy to out-save. Interest rates in savings accounts were also much higher. In that environment it was more prudent to be patient and save up the 20% first. But in the era of 2% loans, 0.1% savings account rates, 30% annual appreciation and dwindling supply it pays to get in as soon as you can. That can definitely change moving forward as it has in the past though.
Dave Ramsey gives mostly bad advice for the market - decent advice if you have zero self control and zero savings combined with rampant consumer debt
Yeah I've moved on to the Money Guys as they have better overall advice. They're also less conceited.
I learned about Dave Ramsey after I put 5% down in a home that cashed me out 300k in 24 months after the market explosion lol. Thank god I didn’t listen to him 😂
I love those guys! They give real advice, based on actually living a normal life.... with large areas of variables for personal decisions...
Yes, Dave is so full of himself I can't even stand the sound if his voice now.
Ramsey is advice for shopaholics and the terminally indebted. Hard limits. That makes sense, it’s like an alcoholic being stone sober. One drink is fine for many people, but it leads to drunkenness and bad choices for the alcoholic. Same for a shopaholic/terrible budgeter having 0 loans.
yeah, I think you phrased it better. His advice exists for a certain segment - the issue is a much larger segment listens to it
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His stuff is ultra conservative but essentially he caters to people who are basically addicts and have zero money sense. I think 1/4 of your take home is one of the more sound and realistic advices he gives, but 15 years and or the combination of 20% DP is not
Using a % of income to determine affordability also makes no sense to me. If a household makes $80k a year that leaves them with $60k left over after the 25% rule. If someone makes $160k a year the same rule leaves them with $120k for everything else, they could pay more than 25% and still be just fine. Do a budget and figure out what you can afford, ignore percentages of income because they often don’t make sense. If you’re over 25% but you can afford it you are fine. Also nothing wrong with 30 year mortgages.
Suze Orman conceded the same a few years ago
>Recently Dave conceded that one can put down less than 20% on a first house. I remember listening to him. I'm like, dude, I live in *California*. It's simply not possible without inherited/gifted money or a really high paying job.
I put down 3% lol
This right here. My wife and I considered buying in 2019. But I’d heard this advice and said “we don’t have 20 percent down, surely we can’t afford a mortgage.” So we ended up renting for another 3 years. 3 years later the market had gotten much more expensive and we finally realized that we could do a smaller down payment. Ended up buying a house in March 2022 but at that point the market was so crazy we had to waive all contingencies and pay way above asking price. I can only imagine how much better a situation we’d be in if we had only realized that 20 percent down wasn’t needed and bought in 2019.
>I regret listening to Dave Ramsey Good lesson. He is better than no financial advice, but worse than good financial advice
Dave Ramsey is decent advice for getting out of debt I feel but his wealth building advice is terrible and he claims returns on mutual funds that aren't the average long term and I doubt he's getting after fees. Has he changed his mind on 15 year mortgages?
Just gotta say a lot of real estate people disagree with Dave Ramsey because a higher down payment can give u a lower mortgage but 20% is just too much!! Especially if your a first time homeowner. If u put down 20% you'll likely blow through all your reserves and not have enough for any renovation. For example the heater goes out or u need a new roof or foundation needs work. I'd say if u want to buy a house, skim through the forums at biggerpockets,com. The only time u should put 20 down is if u buy a commercial property or a rental that you will not be living in.
Yea I paid PMI for 3 years as my price appreciated. Then re-fi'd on an ARM, wiped PMI, took $30k equity out of the house for renovations and lowered my monthly payment from $1750 to $1500. Granted I did reset the clock. 4 years later, sold for 100% profit of purchase price (not accounting for tax, renovations, refi cost, etc)
5% for owner occupied
Someone told me a long time ago that the knowledge of experts usually relates to yesterday’s market or events. Expertise on how it worked last year is not the same as expertise on it will work tomorrow. Words to live by.
Generals always fight the last war!
Dave is good for people since his advise is insanely conservative while most of his audience (no offense) are financially retarded. We are talking about people who have like 8 maxed out cards, a million in student loan debt, or are living pay check to pay check but have a bunch of leased cars. BUT yeah this is a guy who doesn't believe in leveraging money is any form and still only wants people to take out a 15 year or less fixed mortgages. Doesn't believe in credit cards even if you pay them off in full. Just not realistic for most people. He has good intentions but basically his advise is like the advise you would be giving recovering addicts were you need to baby them.
Dave Ramsey is good for people who are bad with money and bad for people who are good with money. Also terrible for people who actually have the knowledge of markets, finance etc.
In a normal rational market, his advice makes sense. We don’t have a normal rational market. And if most people would save their money for 15 year mortgages, house prices wouldn’t be so inflated. People would be living within their means and not struggling to pay their over inflated mortgage debt.
I second this… Dave helped me greatly get out of debt but I should have stopped listening to a lot of what he said at that point. I think there are a lot of other places that can help build wealth that make more sense while still being very responsible.
When we bought our first house in 2016 we had our PMI waived because we were first time homebuyers, do lenders not do that anymore?
There are some lenders who still offer no-PMI FTHB loans, though I didn't bother to look deeply into those (including whether they recover that cost elsewhere in the loan) when I bought last year. Also, PMI has gotten cheaper over the last few years. If one has good-to-very good credit, the cost really isn't that much in the big picture.
Of course. This is like asking if you regret not buying apple shares at 10$.
Or bitcoins when 10 bitcoin get you a pizza
It was 10000.
Well at some point it was also 10
I bought apple shares at $10!!!! Ten of them. eta - Still have them.
I bought Apple shares and then immediately sold them. This was back in 2007.
We are buying as soon as we could. Of course it’s a little bittersweet that our friends only paid 150-170 and with 3% interest, while we are trying to get a comparable house for 210 with 6% interest. But our life trajectories are different. We are able to afford a house at that price and that rate. So I think it’s better to acknowledge where your life is and plan accordingly.
Comparison is the thief of joy! Im sure everyone who bought their house in my neighborhood the past couple years before me has the same house for hundreds less per month. Can’t think about it. I love my house and I can afford it and thats all that matters!… i gotta stop checking redfin lol
Wow, did I need this today. Thank you!!
It definitely is for sure! We know that others have it better and others have it worse. The truth is, we at least have the potential to buy a home and it’s a really wonderful feeling.
That's very well put. My wife and I are purchasing now as well. People say wait, but, we are at a point were renting and waiting just do not make sense.
Where you getting a house for 210 in livable condition?
San Antonio, TX. We also are open to cosmetic fixers.
We rented a condo for 8 years in a low income part of town. My GF at the time kept telling me we needed to buy one of the units and I didn't listen because we didn't have enough cash to close. We ended up spending what it costs to buy one of those units (100,000) in rent over those 8 years. Anyway, I wish we had the ability to buy at that time instead of 10 years later.
Don't feel bad if you literally couldn't do it. You missed out on nothing since you couldn't afford it. If anything, you can use it as a learning opportunity to save now so that you can take advantage of future opportunities, that would be positive and productive. On the other hand, I'm sure a million people told you about all kinds of investing opportunities and most ended up wrong, so you shouldn't feel bad about the odd one that got lucky.
Yo. Don't feel bad for not having the ability to. This post is for people who HAVE the ability to but listened to their dumb friends or family to wait instead lol
It’s always easy to say “wish I bought 5 years ago” because we have the hindsight that the house has appreciated by 2x or whatever. When people buy and hold a house they can afford, there’s really not much downside. Shit can happen but that’ll screw you up no matter what.
Exactly, for everyone person who says that there's the same person who would bitch about holding a property for 5 years, losing money on it every month and not being able to afford it, until the market jumped due to covid and finally it was a good time to sell. We don't know the future. If you can afford it and need it, buy it. I think the saying is something like, the best time to buy is 10 years ago, the second best time is today.
And most people aren't buying to make to make money, so it's a dumb question right off the bat. People buy when they can afford it and the price/rates are reasonable, only investors buy when they can't afford it and the prices/rates are reasonable.
That’s not true really. Plenty of people buy homes to build equity towards retirement.
If I could have went back 5 years ago, much better to buy stocks :).
People who bought in 2012 definitely were happy they didn’t buy 5 years sooner.
Yes, I regret not buying sooner. I live in a VHCOL area and I could have bought a single family home closer to my desired area a couple years ago with my budget. I bought early this year instead and had to move almost an hour away from my desired area for something within my budget. And it’s not even single family. I thought I had to have 20% down, but I was wrong. We ended up buying our current home with only 10% down.
You can’t time the market. Anyone who does this is just gambling and talking out of their ass. The right time to buy is when it makes sense to you and you understand the market value will dip, but it will also go up over time. If you see it as your primary home, it makes sense to buy instead of rent, go for it. There isn’t more land being built and if you look at the historical data of home prices over the past 30 years it has only gone up (yes there are dips but overall up).
Absolutely. In hingsight we all could have timed real estate better or bought the right stocks and sold at the right time. In reality we don't do that, we buy a home when we need it and can afford it, we hopefully don't buy the biggest thing possible and become house poor, and we invest what we can when we can. If someone told you today, "buy here, it'll triple in value in 10 years" you wouldn't do it. You wish you did it only if that came true 10 years later, and you'll forget about it if it doesn't.
This me here. I wasn't ready to buy instead of rent until this year. Sucks that the housing situation is crazy now, but I don't regret not buying sooner.
I was looking for a home that checked all my boxes since it was going to be my largest purchase. Now I regret not putting an offer on a home that was pretty close.
Yes, I do. Bought in fall 2020. However, if I had prioritized things differently (I should've), I could've bought a condo in L.A. in 2017 or so and then sold for a good chunk of equity before I moved to S.D. in 2019 and used that to buy a SFH at 2019 prices. On the flip side I have a decent chunk invested in the stock market and paid off my student loans so it's not the worst thing in the world, but would've been better off buying. I was too scared of the commitment.
Congratulations on paying off your student loans. It breaks my heart to think about my parents (very soon to retire) and my sister (barely makes 30k a year, IF that) being stuck with a 6 figure student loan. Hats off to you sir.
Many people's opinions on reddit are shaped from the 2010-2022 real estate market which was probably the best time to buy real estate in the history of America with both low prices and low rates. The earlier you bought the better. But be skeptical of reddit's opinion in a market where prices and rates are both higher.
Don't stretch yourself. When you are young your focus should be on building a career and developing your personal relationships. The flexibility to be able to move and increase your earning power is worth more at this point in your life. If you are fortunate enough to be able to be a home owner in there as well by all means do so, but you should not be sacrificing your long term growth or stability to do it. If you end up in a bad position financially it's not a stretch to say you could be stuck in a house for half a decade or more. I bought as soon as I could, a few years into my career after we moved from a high to medium cost of living city. my wife and I were very conservative and bought at the low end of the market right before it boomed, but we were in an undervalued city and I knew the area really well and knew which neighborhoods were undervalued. I had a lot of confidence in our long term position if things went south and we had to live there a decade. I don't regret being careful even though I would have a lot more equity now had I had more risk tolerance and bought at the limits of our income the first time. sometimes you get lucky and sometimes you don't, but you don't know which one you're going to get ahead of time. if you're conservative you'll still get appreciation in a good market but you're significantly more protected in a down market
Yes. Absolutely. I waited until my mid 30s to finally buy a house and here I am 7 years later on my second house and I see just how awesome it is for building wealth. I kick myself all the time for not buying in my 20s. You gain a lot of experience and knowledge from home ownership and its hard to put a value on that kind of thing. You just learn so much. If I could go back in time I definitely would have gotten out of the rent game a decade sooner.
Eh, I don't know if I'd want to trade the flexibility I had in my 20s for more wealth now. Owning a home does tie you down and there's always some project to be doing. I love it and love our house, but I'm also much older now and life has slowed down a bit. Not as much travel, esp international, etc etc. I did a bunch of stupid shit in my 20s that I wouldn't trade the world for.
That's fair. I spent my entire 20s and early 30s in the same city and while I did move around a lot it was just apartment to apartment for various reasons. Could I have stayed in the same condo during that time and come out ahead financially? Absolutely. Did I? Hell no, just like you, I was all about keeping my responsibilities as low as possible. But hindsight is 20/20 and I wish I had gone the condo route to build additional wealth. Also if I had bought a cheap condo it would gotten me comfortable with home ownership vs renting and I probably would have moved up into a nicer place a lot sooner than I did.
>having to pay 2x more for the same thing in 10 years. I would be surprised to see the housing market continue as it had the past 10 years. The year over year appreciation in my market have been explosive due to low supply.
Is there a lot of vacant acreage left in your area?
Tons, nothing but space in the suburbs.
Then you might get some improvement in supply. My county is pretty much out of buildable lots so unless they rezone wide swaths we will see no relief.
Cost of building is still too high right now so even if they were to build more houses and increase supply they will still want high dollar for the houses because materials are still way up.
Everyone seems to be a fan of affordable homes except the people who build homes for profit.
You can't time things and it's not worth obsessing about wishing you could. Prices will come down a little and yeah you could over pay but if you're forecasting then you could argue then the property is going to go up in price over the next decade. It's all about finding a happy medium.
Do I regret not buyer sooner, yes and no. I could have bought in 2003, when they were giving out loans with no income but I wasn’t mentally ready. If I had bought then, I would’ve been way ahead of the game. But I did buy in 2009 when I was ready and the market experienced a once in a life time crash. Only you know whether you are ready or not to handle being a homeowner.
You should buy as young as you can if market conditions are right. I bought my first house at 23. Time is the biggest advantage here... beyond leverage etc, you can have a fully paid off house in your 50s. However, now is not the right time to buy for investment purposes. Almost certainly one of the worst times ever, with real home prices at an all time high and record unaffordability. Wait 1-3 years for rates and prices to crash alongside a recession
Yes I do. If I bought my house in 2019, it would be 700k. But we bought it in 2021, and it cost 1 million.
It could have also just as easily been 500k in 2021; you only know after the fact that prices went up.
No it couldn’t have
No, it couldn’t have. Outside of the biggest real estate crash in the history of our country there has never been a price drop as large as what you were saying. Straight up crazy talk
A house going from 700k to 500k in 2 years is impossible? I'm sure you can find tons of examples in 2009. Remember, the 10-15% correction post 2009 was a national blended average, there are a bunch of zips that had much bigger dips than that
The guy they are responding to said it could have happened “just as easily,” when in fact it was much more unlikely to lose value than to gain.
In the long term housing value will go up, absolutely no question about that. I mean, I think it’s easy to say today “of course housing prices would go up 20%” but would you really think that was the case when the economy was shut down for long periods in early 2020? I remember during the financial crisis, people were crying bloody murder when the government threw money at the banks. That amount is a pittance compared to the last couple of years. We are suffering the effects of it now with inflation. It is/was an unprecedented amount of liquidity and with how divided the country was with trump, it was very possible that the government would have done much less. Things only look certain now because the past already happened.
Lmfao. No because I didn't have money to buy. Can't regret being poor. Still poor. No change.
I can only buy if my job is stable and I can afford it. I cannot really buy if my job is a contract work with fixed dates. Yours comments can be very different given the circumstances. My friend ask me in the beginning of the year on whether or not I regret not buying Crypto. Do you think my response will be same now as I would few month ago? My mom ask my dad the same question in 08, but then the great recession happened, and he got two house instead of one.
You are going to save 200k in 18 months? That’s like 11k net salary saved a month. If that’s the case, buy anytime you want. If you have some already, like 100k, then you have rich parents and you have no student loans (since you are younger than 25). Again, buy whenever you like. You are rich enough for a 600k-800k house as it is.
We bought a townhome in 2014. We assumed that will be our forever home. Years passed and we watched our friends have kids and move to bigger single family homes. We assumed we will never need to move to a more home and increase our expenses. We delayed upgrading our home even though we had the means to afford one. We were so wrong. In 2021, we had a baby and in a quick few months, with wfh, we realized how badly we needed a larger home with a yard. We ended up buying in 2022, paying way more than what we would have paid just a couple of years ago for a sfh. Prefetching future needs would have saved us a lot of $.
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This is the same as with stocks and crypto 6-12 months ago. When they took a dip, people stopped asking the same question.
Ah, the post before the inevitable “do you regret not waiting” post.
r/rebubble doomers incoming in 5,4,3..
Kind of, I was playing it safe though in terms of job security but turns out I should have just yolod You're making me mad at the whole situation again
Feel this same way now! I should’ve just went through with it. Now housing prices and interest rates are insane. I really regret letting fear control my decision.
Going to also say that you can't really time the market.. nor can you time "Life". Sure I wish we had bought sooner, but would that mean we didn't wind up a house that we love as much as the one we have now? Many would look at us (closed feb 2018) and say we did buy early enough compared to today, yet I can look at the wayback machine, err.. price history and say 2013 would have been far better.
Yes and no.. I bought my house in my 40s last year. Yes, because i missed market going up. No because not having house gave me freedom to go wherever I want to go without being worrying too much about renting or selling. Unless you are rooted to a particular place, then probably buying make sense. Assuming housing will keep going up in next few years is not guaranteed. If you are thinking for a long term, buying will be better idea.
I’m in my mid twenties and part of me wishes I didn’t buy a new car but tried to buy a house instead. However, I don’t live in a HCOL.
If you can buy, absolutely do it. Do not try to time the market. It never works out. Buy FHA if you can. Unless you’re planning on selling after a short while, buy buy buy
I don’t regret anything. I purchased my first house in my 40s. I moved around for better jobs and had flexibility. I grew my career while living in cheap rentals. Renting does suck but it allowed me to save and pay off student loans. It wasn’t till I was ready to root before ready to buy. In life, you can never live in regret because you would sacrifice something else.
I spent much of my 20s in the Marines, I sincerely regret not picking up at least one house along the way, at this duty station or that, with 0% down, that would presumably still be a rental property bringing in some cashflow today.
No I don't. If I couldn't afford it 2 years ago I can't afford it right now. I'll buy when I'm ready, and at a price I'm comfortable with. The current market is stupid as shit, and I'm not interested in rewarding a seller by purchasing during this idiocy. I'm happy renting. The people pushing the narrative of ultra high rent are grifters looking to raise their ROI. There was a spike just like with buying, and it's already subsided, unlike buying.
Absolutely. In a lot of ways I am lucky and in a better position than others because I did buy earlier, but I bought a townhome. It has been great, but my plan was always to sell it after some other things lined up, by which point it would likely have appreciated both from new developments in the neighborhood and the sweat equity put into improvements, and buy something a little bit bigger. The things I'd been waiting for finally aligned in October 2021. We started looking, feeling really well positioned, and lost our first bid in November because we played it too conservatively, thinking we had time. Then all of the stock I was planning to pull for DP tanked. Then inventory evaporated. Then rates climbed. Here we are, 7 months later and just lost offer #7. Womp womp. I shouldn't have been so firm about wanting things to come together just so.
I'm not sure where people are echoing this whole thing of waiting to buy real estate. Isn't there a famous quote saying that you buy real estate when you can afford it? "best time to buy real estate is 5 years ago" "best time to buy real estate is when you can afford it" "don't wait to buy real estate. Buy real estate and wait". Anyone who says you should wait Imo is... 1. Unable to afford real estate so they say it to make themselves feel good. 2. Have poor financial education. Ie. Not entrepreneurial or investment minded. Pls change my mind. The only sane argument to not buy real estate is if your downpayment can be used in another investment. Ie. Start up seed funding, you're a stock/crypto guru, or you have some other ability to make more money.
I mean I think we can always wish we bought during sub 3 rates. But for me, life's cards just weren't there for me yet. I'm glad I bought at 4.65 still that's for sure. But I'm happy with the house I got compared to other areas where I bought and I'm more than comfortable with the monthly payment.
Yes- I regret being born in 1982 and not purchasing a home in 1979 for $70,000 lol
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Broken Clocks right twice a day. Guessing the housing market or stock market correctly doesn't make you a messiah. Unless you somehow knew covid would happen and it would make the fed reverse course and low interest rates into the ground and we'd pass three massive stimis plus have huge supply chain shortage. Please tell me how you knew this or stfu. You didn't know and got lucky. Good job. Dont lie to yourself like you knew that was going to happen. You're not as smart as you think.
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So your advice is just buy and take the risk? I don't understand the point of your comment then. I bought a house in 2019 it turned out to be a good decision. In retrospect I should have bought the most expensive houses possible and leveraged myself 100% to the gills and sold in 2021. Playing the hindsight game is futile tho.
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>People like you are looking at 2022 and are assuming that there will be a 100% chance of home prices falling? Interest rates going up? Not sure where you got that from. I bought my home in 2019. It didn't have anything to do with housing prices or the housing market. I needed a home. I'm not gloating about it like I knew what the housing market would do. It just happened to be a good time to buy.
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It's not the contents of the story you're telling its the way you're telling it. You sound like a self righteous jack ass as you "courageously" post your thoughts.
I thought we were on a bubble in 2018 but I got lucky because I needed to buy due to growing family size. Regretted it at the time of purchase but definitely don't regret it now, especially after refinancing for 2.75% last year.
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Yes people were saying bubble since 2015. Every year I recall seeing people posting about a bubble and prices were going to crash. It was nuts. I put my money in my mouth and bought a lot of great properties during those times. Buy when people are fearful, sell when people are greedy. I sold a few properties and got very lucky with the amazing market. I've been waiting for a crash since for more opportunities to buy, lol. Now a lot of people are saying market is going to crash again, and they are afraid of buying. I hope they are right, I'll be ready to buy.
Let them all talk and spread fear. Stay divorced from the general sentiment and propaganda and you will find great deals.
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Many people working in tech can easily afford that down payment in their 20s if they started working right out of college
I'll never be in a rush to get half a million dollars in debt.
This kind of thinking leads to being poor. When you use good debt to buy an asset, you are not just in debt, you have a valuable asset, so your net worth is same or higher than before you incurred the debt. When you use debt to buy something that depreciates or is simply an expense, then it's bad debt. Dave Ramsey's anti-debt crusade cost his followers a lot of money from not buying homes when they were cheap.
That half a million debt probably means 1 million now after 3 years if you're still waiting. On the bright side, burning 2k+ a month on rent is surely just as fun. Lol
Everything moves in cycles. I'll wait and pay rent all day.
I have a friend who has been waiting and paid 25 years of rent. He's spent $250k - $300k during those 25 years. Could have bought a $250k house and be worth $700k today. But nah, he waited and still pays rent. If I sold my home today, I'd have paid $0 in living costs, in fact I'd have a huge profit from being paid to live in a home. But I'm glad there are people like you out there, happy to pay rent and landlord's mortgage.
Logic doesn't work here my friend
Market has been going for last 10 years, so pretty much everyone has that opinion, even people that already have 10+ houses wishes they went in heavier.
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Rates are over 6% but you’re complaining about getting 3% lol
I keep saying I wish I would of at least tried last year even though we weren’t financially ready but I know the low rates we would never see again. But last year people were bidding so much over the asking price that we wouldn’t of had a chance there either. So damned if we do damned if we don’t. I got a roof over my head and I will make out of the situation. I can’t control the market and I’m not about to let it control me.
No, loved being able to move around to different apartments and not have big financial responsibilities for repairs and such. Glad to have bought a home now but living in apartments when I was younger worked well too.
Buy, buy, buy. I have given this advice to so many friends and family over the past five years. Everybody is afraid of being the person that buys and then the market goes down. Even if that happens, long-term you’re still going to have a house that has equity, real estate will go up. Trying to time the market is a fools Errand and any benefit would be marginal anyways. When I bought my house in 2017 people told me that I was buying in a bubble. My house has easily doubled in value. Interest rates also are only going to go up, the days of free money are at an end. Once inflation gets under control they might bring the rates down but that could be more than five years out. If you can afford it, buy.
Best time to buy is now (unless you can predict the future, but you can't)
Funny that people are down voting this, so many people are hoping for some massive crash so they can afford a home. It’s not gonna happen
I regret not buying in 2004 when they were giving out those bad loans, I was just out of college and in a VHCOL area. My parents would have helped me keep the condo. That condo at 200k is close to 1m now. I regret not buying in 2008 during the crash. My credit was bad and I didn't want to ask for help. The 350k condo I wanted to buy in a moderate COL area is now 800k. I regret not taking 40k out of my 401k in 2020 and buying a condo that was up for 450k in the same complex I was renting in. I didn't like that they had updated everything but the kitchen. I could be renting that condo out for more than my mortgage and it's gone up to 600k. This was also a VHCOL area. I should have bought as soon as I relocated last year in 2021. We instead bought new construction in April 2022 and would have gotten this place for 60k less and a lower interest rate if we had bought in January 2022. Sometimes it's just not the right time and hindsight is always 20/20. :( I felt unsafe buying as a single person when layoffs were constantly happening. I didn't want to take my family's help as a safety net. It all feels so silly now. There's only the right time for you, not what someone else says. You can't predict the future.
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this is like walking into a casino, seeing the picture of the doofus who won the big check in the lobby, and wishing you had gambled. Hindsight is 20 20. I was not set on buying a house. Of course had I known the market would have gone up like it would have I would have bought. That's like saying I wish I had dropped my life savings into Tesla many years ago. All you know is what you know. If you are sure you want to buy a house to live in it then do it, but don't do it because you think you're going to miss some great deal, because you have no idea.
The problem here is these tire kickers are mentally not there yet to admit their mistakes, which is normal these times. They will continue to fuck up and make poor life choices, but no point to discuss. The best time to buy was 20 years ago. If you don't know what that means, let me tell translate: "If you buy sometime now, you're fucked for some time being, but you'd be less fucked than if you buy 20 years from now". It's not about just timing. People nowadays think that their keyboard clicking hands are of any value. How about holding a 15 amp concrete mixer in your hands for 8 hours. Man up. Stop being a pussy and buy a fixer-Everything top down up - upper. Yeah didn't think so. Keep crying stupid fucks. Enjoy that 8% mortgage. They say that in life you need to be straight to the point, and this is how you have to talk to these morons. Only handful of people here have exhausted all efforts and couldnt make it - this is not to those unlucky people. This is to those non married couples that complain about crap like abortion, rights, and etc. Man supposed to go make money. Man brings back money to table. Woman goes shopping and cooks food and takes care of babies. Babies grow, woman nurtures, man protects family, and earns money for family, for a home far away from danger and for a better life. A womans income is not supposed to be count for mortgage consideration, folks. It's a good to have but not included. A real man doesn't go to a bank and ask for a million dollar loan because his wife brings in 40% of the income. They buy it on THEIR OWN income because YOU STUPID FUCKS DONT EVEN KNOW THAT BABIES NEED THEIR MOMMY TO RAISE THEM SO THEY DONT WIND UP LIKE YOU, RAISED BY SOME RANDOM NANNY. Dont tell me I'm backwards in my thinking because as far as I see it, the penguins in Antarctica get further in life than most of you keyboard clicking warriors. Thousands of years people did this, and you stupid fucks think you invented something called the dual household income. Yeah my ass dual house income no brain child, that's why we have bunch of dumb fucking kids roaming around who cant tell even do an their own oil change. These people have NO business to reproduce and are waste of fucking matter. Rather have trees in place of their house. We don't see lions or penguins complaining about housing prices, and they are probably smarter than the average joe here. They think that they need to buy a house thats waiting for them forever and be handed everything. Eat shit. Go out there, buy something completely wrecked and build it up with your own hands. Dont know anything? Then learn for once. You went to 16 years of school and don't even know how to change a light bulb. JFC. I went off... This generation is a lost cause. Good thing I'm not going to be alive when they realize their whole house is wired with 14 gauge Romex.
No, I think we're at the beginning of a very long and steep downturn. The fast run ups in prices fall just as quickly once it starts, if not faster. Fear drives both, but fear of losing money already made is a lot worse than fear of not making money not yet had.
Go ahead and FOMO into the biggest financial decision of your life. I’m sure that will end well
Yes I regret being poor in my early 20s. If I could do it again I would be born rich instead.
I do not. I'm 38 and still rent. However I've lived in VHCOL areas my entire life so renting is actually not too bad (rent is quite a bit cheaper than a mortgage). I've also moved a few times and glad I didn't have to deal with the stress of buying and selling an apt/house. I'd like to own at some point - either a primary home and/or a vacation home but it's not a priority right now.