Dave Ramsey, host of a famous and founder of Ramsey Solutions, has some long places Advice on home ownership.
For those who did not know, Ramsey warned his followers for decades Not entering debt. He is a strong defender for using money only for purchases and incredibly recognizing what you can only tolerate.
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It makes a simple exception to buy a house. This is probably because if you can maintain a mortgage to be sufficiently low, then it is worth seizing this debt because it becomes an investment. In addition, this money will pay for rent if it is not a mortgage, so you do not spend money that you can save anyway.
to this end , Here is how Ramzi explains his philosophy when it comes to buying a house:
The most important note that Ramsey wants to make sure we understand is that it prefers that we do not borrow at all.
Most of Ramzi’s followers will understand that he grew up with blue collar and created a wealth portfolio of $ 4 million by time at the time when 26 were through the traditional means of buying real estate and investment. However, it is sad that this traditional method involves a lot of borrowing, which led to Ramezi immersed and unable to pay his loans to banks.
In 1986, he applied for bankruptcy, and people advised how to avoid this type of financial disasters since then. The basis for his education is to stay outside the debt.
Yes, even when it comes to buying a house. Why?
Because when it comes to payment, if you have debts you cannot bear fruit, you may end up in financial ruin, just like Dave.
In an ideal world, you will save enough money to buy a house directly. But few of us live in this ideal world, especially as housing prices continue to rise.
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So, as Ramsey said, if you have to borrow, most of us must, your goal should be to maintain a mortgage less than a quarter of your salary at home. This means that if you bring $ 4,000 per month, your mortgage should be above $ 1,000.
It may seem crazy for some, but this approach guarantees that you still have a lot of money to provide emergency situations, spending on home needs such as grocery stores, gas, basic necessities and investment.
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