I have never heard of you before, but loved this video. I bought my house at 20 back in 2019 for $197,500. My father thought I was insane and was encouraging me not to. I didn’t care if the market went up or down, because my mortgage was going to be roughly $1250 for a 3 bed 2 bath house with a yard for my 2 dogs. Vs my 1 bedroom apartment was raising my rent from $800 to $1050 a month. I had a few thousand to cover my inspections, closing costs, etc. and figured it was a no brainer. Now my home is up $150,000 in equity, I refinance for a better interest rate, and got my mortgage insurance dropped from the equity and my mortgage is now $1010. Best decision I’ve ever made

@tiberianexcalibur

2 жыл бұрын

You are the comment that I can really relate to and apply to my life. Not like Dave Ramsay guests on his shows bragging about making $160k+/year with a $500k house and a few Mercedes, struggling with finance problems.

@dylansadude

2 жыл бұрын

@@tiberianexcalibur Thank you. Dave Ramsey can be a huge help to many people who struggle with debt. However his advice isn’t practical most of the time.

@dylansadude

2 жыл бұрын

@Beni I have a locked in rate of 2.85 percent.

@tiberianexcalibur

2 жыл бұрын

@Beni the rates are locked once you signed the papers. One of the things he has to worry about is property taxes that goes up every year due to rising value of homes.

@LasVegasRaidersFan702

2 жыл бұрын

Where did you buy a 3 bed / 2 bath house with a yard for less than $200K in 2019?

Dave Ramsey is NOT housing market daddy - Javier is the true housing market ZADDY

@dianesapp7955

2 жыл бұрын

hey!! i know you how cool - I actually stated listening to your channel since I am in the market to buy a house. You got a lot of great information for first time homebuyers. thanks

@zakattack467

2 жыл бұрын

Jajajajaja

@analara8356

2 жыл бұрын

Lol 😂

@winaldbertremonvil5749

2 жыл бұрын

😂😂😂

@erictrejo4439

2 жыл бұрын

Well he was in the bussiness for a long time dude.

Javier! This is exactly what has happened to me! My husband and I were starting to browse the market and we were like okay cool we need to save about 60K and in a couple years we can get a house, and now we still don't have 20% and houses are SO much more expensive! ughhhhhh :(

@31joito

2 жыл бұрын

2023 due to inflation, house prices will drop. Yeah interest rates will go up. Don’t be afraid of this. Look at the interest rates for the last 5-8 years… they were about what they are today.

@ivy5554

2 жыл бұрын

@@31joito They aren't going to go down THAT much, the issue is supply and demand in a lot of places.

@mph5896

2 жыл бұрын

I would not bother with trying to save 20% down. Just pay the PMI. If you get a standard loan (not FHA), you can get an appraisal later on if the value goes up to drop the PMI after a certain criteria is met.

@therainbro

2 жыл бұрын

@@31joito If you’re in the Phoenix area like Javier, I doubt the prices are going to drop next year. Hundreds, if not thousands of people are moving to this area every day.. it’s not slowing down and the demand is going up every day. I have friends who are “waiting on the sideline” for the market to crash

@arizonalifestyle79

2 жыл бұрын

@@therainbro I'm in the Phoenix area and I agree at this point it looks like the demand is going to keep pushing prices up even with interest rates creeping up..

I am praying and looking this year for my first home

@amiekamara97

2 жыл бұрын

Me too

Dave Ramsey was good for the start of my debt free journey I got rid of all my consumer debt. I thought I could do the 20% down and the 15 year mortgage but it was just unrealistic in my market. Lol so I decided to jump head first into the market after my credit score went up and used a minimum 3% FTHB program. Best decision I could’ve ever done. The home prices are increasing. And the equity I’m gaining in my home. Went with my credit union to waive PMI. Soooooo the 20% thing for me didn’t make sense.

@olfab1

2 жыл бұрын

Can you have PMI waived without putting 20% down?

@geraldego282

2 жыл бұрын

Yes if you went with a conventional loan. But It can not be waived with an FHA loan unless you refinance

@AB-fq4mr

2 жыл бұрын

Why do I keep thinking this guy paid in extra points upfront and was marketed no PMI by the bank?

@mph5896

2 жыл бұрын

@@olfab1 Why would a lender waive PMI? That is the cushion the lender requires to give you a loan.

@olfab1

2 жыл бұрын

@@mph5896Why are you asking me? That's what the main comment says happened so I wanted him to explain...I don't think it's possible except for a piggyback 80/10/10.

I am a Dave Ransey follower to an extend. I am debt free except for my new mortgage and the only reason I bought a house is because I said "screw 20". By the time I had 20% saved prices had gone up in 2020, if I kept waiting to have 20% again would have taken me another year and a half and I would still be renting today.

This is precisely what happened to me. I had the 3-5% in 2019 but I still owed a little on my car and was waiting for some raises to kick in. Now I’m sitting with my 20% down, closing costs and emergency fund, and nearly priced out of the market. Although, it’s a little unfair of a comparison because when the hell has housing ever moonshotted in such a sharp period of time? Apples to oranges.

@ritoa.5946

2 жыл бұрын

If you got 20% down and feel outpriced. Find a home you like do 3.5% down make a high offer use the rest to buy down interest rates or if you qualify for conventional you can buy out pmi upfront. The leftover is closing cost and w.e is left , offer it over appraisal to the seller. If you have any left after that offer to oay theor hoa dues or a % of transfer tax. Its the little things that matter. Also as an agent i always give back .5% of commission to the sellers to help my buyers offers. Ask your agent to do the same!!

@fartoplata308

2 жыл бұрын

Thanks for the free advice. I’ll sock it away for if things start getting desperate.

@msblessalkalinemix7834

2 жыл бұрын

@fartoplata- I agree, In my area I’ve seen people who bought their houses in 2015 for 200K now the houses are worth 940K- like, what the hell? No way I’m outbidding anyone. No darn way! After a storm there shall be a calm.

@NoName-gk2sj

Жыл бұрын

​@@ritoa.5946 Hey bro do you work in the southern cali area

Our PMI is only $60 a month and the home appreciated 100k+ in the first year. Losing out on 100k of equity, and potentially being priced out of the market to save $720 a year in PMI just seems ridiculous.

@bencortez9907

2 жыл бұрын

Same boat but my equity didn’t go up as much as you. 5 percent down in my case

@bencortez9907

2 жыл бұрын

@Beyond Tribalism in my case I borrowed 314K.

@MsShadowLlama

2 жыл бұрын

@Beyond Tribalism Bought house for 420k in Tampa, FL in Nov 2020. Borrowed 378k; put 10% down.

In truth, many of Dave Ramsey's methods don't make a lot of sense based purely on numbers and he has admitted that quite a few times from what i've seen. I think his plans are more for people to change their habits and mindsets to not rely on taking on more debt

@gemdiver

2 жыл бұрын

He was chastising a guy for buying a brand new car when a used older model was more than the new car!

@tiberianexcalibur

2 жыл бұрын

Most his guests live on a very generous and comfortable income, they just don’t know to how to quit buying the most expensive house, car, and running up their credit card. I wish I had their problem.

@mssha1980

2 жыл бұрын

Fools proof advice

Same thing happens with kids. People tell you to wait until you have the perfect relationship and x amount of money and that you have plenty of time, and should enjoy yourself as long as possible first (whatever that means). By the time you start trying you realise your fertility has bought a retirement home in Florida and gone to live there permanently. The same people who influenced you to delay (maybe because of the disruption it might cause to their lives) start asking why you dont have a kid yet? Like you can just press a magic button and pop them out in your late thirties, no problem.

This is exactly what happened to us. Bought a fixer upper in 2018 for $100,000, only put 3% down and paid PMI. Still cheaper than renting. That same house is now worth over $200,000 and we are about to sell and use that money to put 20% down on a construction loan and custom build our dream house. Thank God we bought when we did, or we would have no hope of breaking into the market now.

Great video, that’s exactly what I did. I closed on my first home in Dec 2020, it was a fixer Upper, valued at $150k similar property in the area were $165k move-in-ready. We settled at $140k. Got a Conventional with 2.5% loan. today I have a comfortable monthly payment and about $25k-$30k in equity, I call it “my bridge” home because it will help me get to the home I really want to live in a few years.

@brandoinjoque692

2 жыл бұрын

That’s Awesome good for you 👍

Ok so I purchased my 1st home last year using his and yours advice I watched videos from both of you all and then just tweaked the plan to my income and benefit and safe to say everything worked to my plan so Thanks

@caball3ro

2 жыл бұрын

Congrats @Tracey G! 🎉

Thank you so much for this video. I've been going back and forth with myself about what to do for the last few months and this is exactly what I needed to hear.

I started your Chanel and "Win The House You Love" last year. The Knowledge I received from both of your channels was perfect! My husband and I closed on The house we loved on December 6th! Thank you for creating these informative videos!

I wish I could find a house for under $500K in a nice neighborhood with great schools in Los Angeles, CA 😭 The house I'm looking now is $780!

“It’s not going to be perfect but it can be good enough.” ✨ I appreciate the words of encouragement!

Single, first time home buyer here. Blessed to be able to have 20% ready for house (within my budget, done my calculations) and looking this year. Personally I'd be ok putting down less than 20 for a house if PMI wasn't such an obvious scam. Im not paying extra to "reassure" a bank I'm a safe bet. If it makes sense for me to put down less than 20 to use cash elsewhere I'll do that, but I'm not giving a bank free money, they already got an interest rate.

@MartinezRE1

2 жыл бұрын

That is what I call the Mendoza line , FY PMI

@stldweller

2 жыл бұрын

I still dont even understand the housing crash of 2008, all those mortgage companies had insurance on subprime loans a default should have ended in insurance making the bank whole.

@stephenx2857

2 жыл бұрын

@@stldweller subprime loans were private securities. many didn't have PMI or require it. many lenders were running scams, second/third mortgages on homes ...none of these had PMI, the nature of the investment securities had leverage. ...consider a single home loan, bundled with hundreds if not thousands of others...sold as a single product, and essentially, bets and leverage made against it. so... say. the value of the loans was 100 mil, the bets for and against it might have been 100 billion. just astronomically fuckery numbers. done over and over again on dogshit rated loans. ....not to mention, when wall street realized shit was going south, they then sold those security products to people knowing they were worthless, for artificially propped up amts. So... your big gov retirement accounts were buying up billions worth of worthless securities. another angle... consider for a moment, during hurricane andrew, in florida, several insurance companies went bankrupt, because they couldn't pay on claims against the policies they had written. I'm sure similar issues to that ...loans were being written at 125% of the value of the home, no income verification, no down payment, adjustable rates. interest only loans (people paying 3-5 yrs and paying zero on the principal/only interest.... while at the same time the interest rates were set to balloon to the stratosphere... so your teaser rate...some people could afford, then because just not possible for thousands and thousands of people) all of these super shitty products, sold as top tier investments. And then... people stopped paying, defaults rose. what's a default. people stop paying. if you're not paying an insurance contract (PMI) who knows if those insurance backstops to loans were even active. and because of deregulation, local banks, or actual community focused entities didn't control loans, hedge funds and big banks did... so a "direct to foreclosure" model was adopted... where as maybe in bygone eras... local banks might work with a home borrower to figure out late payments/repayments. nope.. hedge funds cut their losses. tried to flip homes from foreclosures... and this was even before large scale foreclosures occurred. it truly is a colossal soup of fuckery. this idea no one saw it coming is laughable as fuck.

My man! That was a great video. Every home purchase comes with an element of risk but that’s life. I love your approach to this topic and hopefully lots of folks that don’t have a “perfect portfolio” can become home owners and improve their lives. Great work.

I'm always in the middle with this. Trying to understand and prepare the best I can but knowing when to jump and following through. It's all about knowing when and handling whatever comes when you do

This is such an eye opening video. Thank you for knocking some holes on our thinking. I had that formula in my head and now am looking at your common sense approach. Thanks again!

My parents and my grandparents didn't even put 20 percent down. They did more like 3 to 5 percent. I think Dave's advice worked when rents wasn't 1000, 1500, 2000. If I'm paying that much in rent then you can afford a mortgage in most cases

@Auto209

Жыл бұрын

Yeah it’s wild rent is essentially throwing away your money on PMI and interest.

Thank you so much for this point of view it makes the star process of buying a home not as stressful.

Other than my family, your videos were the most helpful resource when planning to buy a house. Things are looking good. Thank you so much, Javier. Informative but also entertaining. 💯

On point! Thanks for giving me some confidence back

Javier thanks for opening up my eyes. I've been talking to many friends and I think this will be my year to buy.

My PMI is like $60 a month, and with the way home prices are appreciating I could probablly refinance in 1-2 years and not have to pay any at all. The 20% for a downpayment isnt always necessary. Even with the pmi I'm paying several hundred dollars less for a larger, nicer home than I could get renting.

@bencortez9907

2 жыл бұрын

Yes sir. Mine is 68 also. I’m curious how thing will ultimately play out as I did pay at least 20 above last year. My market was so hot I had to pay 12K above appraisal but at the end my payments are in line with what I would pay for renting.

@christophermatthews4896

2 жыл бұрын

Yeah same PMI for me wasn’t as bad as i thought it would be, mines even less

@theGrayArea2

2 жыл бұрын

Refinancing cost money. So people really should do their best to have a minimum of 20% down and lock in a great rate because refinancing a home where I’m from Los Angeles area will easily run you 20k. Additionally comparing a mortgage to renting an apartment isn’t an apples to apples comparison. Home ownership is 10x more expensive, just wait until that roof needs replacing and other major repairs, this isn’t to detour from home buying but only to encourage home buyers to actually be able to afford their home

@ivy5554

2 жыл бұрын

@@theGrayArea2 It can be more expensive (especially to purchase) but the point is that instead of throwing your money away on rent you've invested it. Also before you purchase you can find out how old the roof is and things like that, and make a decision you can afford or are comfortable with. It's all about making a smart investment.

@laurenadavison

2 жыл бұрын

Same! Our PMI is only $31/month. Seriously regret waiting so long saving up for a larger down payment. Even though we had 20% to put down, we ended up holding onto most of it because of how inconsequential the pmi was.

Wish i would've bought in my area 2 years ago with 5% 🤥 I found Dave right before the panda and thought i really needed 20% 😪. Life lessons lol

I love your chanel. My husband and I are 24 and 26 and recently realized we had home buying power. We used to think we needed 100,000 saved before even thinking about it but we realized that we're paying $800+ in rent, and saving 500 each monthly with very good credit. So of we tack on another 300, that we could afford a mortgage payment. We have savings for closing costs and DPA covers our 3% for conventional and we walk away without touching our checking account at all

Thanks Javier for clarifying that! I’m looking to purchase my first home in a couple of months.

Home ownership is part of what gets a person into a good place, waiting to be in a good place may never happen as long as you're throwing money away on rent. The better idea is get a house below what it seems you can get. This is why the term starter home exists. Although I see it's getting hard to do right now

Good video...! Inflation is hard to keep up with the price of homes going up year to year. This is the point I make to others when I'm asked as an investor . Glad you are pointing out to your viewers.

This was a great video. I'm a perfectionist type person. While I wasn't going to wait till I had 20% down. I did not like the idea of having to pay PMI. But you opened a new perspective to me. Always coming through with great info for us regular folks lol

I just told my 23 year old daughter the same thing! She just got approved to buy a house. First time viewer & new subscriber!

You just got a subscriber because you talk with honesty and being real

Interesting points , saving at the moment to afford a monthly house payment (conservatively taking into account utilities, maintenance, current budget/cost of living spend, and assuming 401k contribution). Great point that folks need to consider the potential cost of waiting to buy (rising home prices = bigger DwnPymt, no equity, ) vs continuing to save.

I’ve been watching your channel since 2019 and where I started, I feel I’ve come a long way. I’ve never had the perfect scenario, I’ve never had 20% down, a good credit score and debt free. I had two babies in my early 20’s and bought a 3 year old vehicle that would have been my mortgage, and I would have had an apartment but life happens and now I can’t afford to rent there. 😅 But with income tax season coming up, my credit score is better and I’m hoping to buy a cheaper home that I can afford, that’s maybe a little farther out of town. We’ll see! I’ve made my mind up to buy what I can afford even if it’s not perfect, but it will work 😊

As a former die hard Financial Peace University grad I definitely look back at all my extremely strong held beliefs stemming from what I learned from Dave and think dang I wasted a lot of time. When I do something I do it big. So I was determined not to buy a home in So-Cal until I had 20% and/or I could pay my mortgage off in at most 20 years. 😭 That’s basically an impossibility in my area unless you’re wealthy. I can’t be too mad at myself as I was just trying to be responsible and truly financially secure. But now I wish I had had a better plan then.

@eddieblake097

Жыл бұрын

big Dave fan here, what would you do different?

So glad you blessed us with this video!

I am one of the living proof that this works. Refinance after one year will more than 20% equity. Move from FHA to Conventional, and dropped my PMI. This is beautiful and I à am ready to start again and build that portfolio.👌🏾

You're amazing love your videos. Pls keep helping us.

I thought Javier made some good points. I found this helpful . The considerations of timing on purchasing a home can be complex and muli-faceted. It"s good to hear this perspective.

Totally agree. I'm in California and every time I get close to 20% the prices go up just like in your example. Crazy moving target!

Really puts things into perspective. Thanks!

That’s why I love this guy man Javier you my boy !

Love this I did exactly the same breakdown with my brother he had 3% to buy 4 years ago. And he Decided to wait . I bought 2017 with 3% down. I am now in my second house and had extra money from my first house to buy an investment property. Do your best to keep your debt to income low and have 3%- 5% ready.

I bought with a USDA loan in September 2020. Did zero down, 2.5% fixed for 30 years, 2600 sq ft, and $265K just outside Austin. I was happy to get it and the market was already getting crazy. The price I paid was already $10K over asking. Final mortgage was $1900, which was about what rent would be for a similar house. One year later, my house is worth $385K, my mortgage stayed the same, but rents on similar homes are $400 more a month. I’m glad I didn’t do it the Dave Ramsey way. I would have been priced out, not to mention unable to compete with a USDA loan.

This man is amazing. I consulted him when I was discouraged about buying a house and he literally explained and broke things down for my husband and I. He knows what he is talking about.

I agree with you. I love Dave, but am so grateful I bought my 155000 house with only 3 percent down in Colorado when I did .

My favorite video from you. Just what I needed to hear

Great perspective, thanks for the content

💯 Love your video, keep up the good work!

Thanks for sharing. This is something I kinda stress about but mainly because my area in CA has no 270k or even 350k houses…most homes are selling around $600k in my area so it makes it feel like I’m saving for that 20%

Thank you! So glad you did this video about the recent post by Ramsey. Would love to hear your take about the 1 hour long webinar he did!

Hey Javier! Love the content and appreciate the information. Would you be able to do a video on, “Best ways to make your offer stand out”. In the event of a bidding war? Thank you !

I live in a high priced market so I went with the 5% route. It took about 5 years to have over 20% with the pay down and appreciation. 11 years later I have 200k in equity and a cheap mortgage compared to rent.

I bought my second home in 2020 with five percent down, 15 year fixed, 2.25%, and pmi of $16. So happy.

New to your podcast that made me feel 👍 good my future me.😊 I bought a home over 2 years ago nervous at times because of what I hear. However your correct be sensible but be brave. Thanks again...

This is a great point and I’m glad that you made this video. It would take a first time homebuyer with an average income *years* to save up enough for a 20% down payment in this market at these prices. It would help me if everyone followed Ramsey’s advice because there’d be far fewer people buying homes, but I don’t think it’s practical for most people.

Thank you, I needed this!

I enjoyed the video and the advice seems valid for most areas, but I'm thinking less than 20% down may put one at a disadvantage for buying in the SF Bay Area.

Excellent stuff. Thank you.

Take all the information and advice from the “experts” and then form it into what works best for you. I took some of the things Javi said and some of the things other YTers have said. Also my realtor gave me great advice. But do what’s best for you. Only you know what’s best for you.

@KP99

2 жыл бұрын

Probably a dumb question, but does the realtor work for my benefit, or for the seller's benefit if I'm trying to buy? Or does the seller have a separate realtor and my realtor negotiates with their realtor on the price? Like two lawyers negotiating with each other?? Again this is probably a dumb question. Where can I find out more about this?

@mssha1980

2 жыл бұрын

@@KP99 your realtor work for you. Then you have the listing realtor that works for the seller. They both assist their clients in negotiations

Video game study lounge as background music! 🙌🏾 💯

First time home buyer in Houston, Tx I didn’t use a realtor I did all the footwork myself got a 4 bedroom 2 bath 2160 square feet the owners weren’t budging from 165,000. So I paid for the closing and 3.5 percent down payment ended up spending 19,000 roughly. After the appraisal I walked into 40k of equity. I’ve been watching your videos taking notes. I’m the first one in my family to purchase a house. It’s the not knowing that scares people away. Thanks

This was very encouraging!!

Excellent breakdown of the two routes to preparation and how the Dave Ramsey way isnt the only way.

Consider also playing with the numbers as you might be getting a better rate if you put less down. Get the better rate then just put the rest down afterwards to get rid of PMI. Having great lender explain and helping you save is top on my list.

@Benmeglei1

2 жыл бұрын

That’s why I called Tits McGee. My earnings quadruped. Just kidding guys. Don’t fall for comments like that they are a scam.

Love this! so good - like my fellow Church ya would say

LOL I love the Zelda and chill playlist you have going on. I jam it all the time

Good point.

Great content Javier! I'm a loan officer in Michigan just starting a similar channel. Super curious what presentation tech you used in this video to show drawings while split screen with your face in left window. Also curious what camera you are using. If you don't care to share your secrets that's completely fine, keep up the great work/content!

I chose option one. I like Dave Ramsey, I used his snowbowl method to pay down a lot of my debt in a short time. However, I put 5% down cause it gave me the best score/rate, paying extra for a down payment would just get me closer to paying down my 20% and PMI (which is only a $27 difference in my monthly mortgage payment). With 5% down and closing cost I was able to save an extra $7000 to keep in our savings after our house purchase to save for an emergency fund. I used your & Kyle's videos Javier for reference to prepare us for the buying process. Daddy Dave has great advice on how finances should be, it should be something we all should work for to become, however, taking a leap when you are half way there is necessary. Thanks for all the advice 🙏 and helping us to get our first home.

great video man. ill do the 3-5 percent down. in the future can u make a video on buying a hud home. thanks

Could you do a video about buying a townhome or a home with HOA costs? The good and bad of it. Thank you!

Best thing I ever did was get an 80/20 and then refinance. Then after a few years I cashed out the equity and bought a different home using JUST THE EQUITY from the first place. Now I own a home with no mortgage. Hate all you want Ramsey followers - sometimes it makes sense to take on debt instead of paying someone else's mortgage by paying them rent.

@Rose-yt5hi

2 жыл бұрын

Especially now with the rental market also being sky high.

@lawrencenoverojr3096

2 жыл бұрын

Well we love you

@YourOwnWay

2 жыл бұрын

💯 agree. The Ramsey plan is a no-risk way of safely approaching wealth. It’s meant to be a solution for anybody. Your way is riskier but yields more success.

@MrTmenzo

2 жыл бұрын

More specifically you didn't "cash out" equity you did a refinance which isn't free money as you're trying to depict here. So whatever cash you got out will need to be paid back via a new mortgage "refinance"

@vulpixelful

2 жыл бұрын

@@YourOwnWay Well the risk with the Dave Ramsey way is that you are priced out of the market forever

Do the same calculation for 2007 and 2010.

I speak from being young and buying my first house with 0% down and then the market tanks, to buying with 3.5% and having 75K+ in equity and selling, to now having around 100K in equity and buying our dream home. I never had the chance to save for 20% down, partly due to dumb decisions but never found it to be smart to dump so much cash. Now with owning a rental and our dream home we did payoff all our debt and will have a cushion, but that is more for peace of mind given two mortgages is more risk. I would say get over a 740 credit score!

Brought my house Oct. 2020 it was a impulsive decision but the best decision I ever made and wouldn’t change it!!! 2.8 interest rate, 3.5% down. I’m from Philadelphia house in my area now are up 60-100k since o brought my house

I always enjoy this topic. I challenge you to run the numbers on only putting 6% down on a home with PMI VS 20% down and include the differences in interest and PMI as principal payments to keep the monthly line item the same. I have already done this and if you put 20% down and apply the cost of what PMI and interest are to the principal. You’ll save nearly $200k and 12 years on a 300k home @ 6% interest. Run the numbers, it’s better to wait, you’ll even pay it off sooner. Regardless, buying a home is great, there’s just better ways to accomplish the task than others.

3% down of $270,000 = $8,100 so you’ll be paying interest on the rest of the $268,900 if your doing the bare minimum your definitely not doing a 15 year loan, most likely 30 year so you’ll have a higher interest on your loan on top of having to borrow more you’ll also be paying the interest back twice as long, if you couldn’t save up the 20% without a home mortgage what makes people think they’ll be able to pay off all the extra interest by taking the 3% down ? Especially if your a first time home buyer looking to start a family if you couldn’t save up without a family then it’s going to be that much tougher with kids an all that interest still need to be paid off I can’t tell you how the economy will be in the next 15 years let alone 30 years…

Dave actually says 10% minimum but recommends 20% because of PMI. It’s a different set of goals. If your primarily goal is to stop renting and buy a house ASAP, sure 3-5% is fine. Dave’s goal is to be in a position where you can own your house free and clear ASAP with no mortgage/payments. If that’s your goal, a larger down payment (or smaller house) is the plan. Just depends on what your individual goals are. Btw, neither should be done for “dads approval”

I think which option is better depends on: (1) how risk-averse you are (2) opportunity cost -- during the years you are saving for the 20% down payment, put the money in stock market and let it grow there

Such great advice!

Great information

I agree with your approach

Great video, Javier!!

I used to be team 20% no matter what, but then did the math for my own situation. What I was concerned about was paying the $700 spread between my rent and my mortgage including PMI, insurance, and taxes. The $700 can be invested, used to pay down the mortgage to get rid of PMI sooner, or just saved for a rainy day. If the rent where I am wasn’t so outrageous I would just wait to buy, but I want access to that $700 each month so I’m moving forward with less than 20%. I would call 20% overprepared, it’s just different for everyone what they need and the impact of their choice.

I think this was a great video. Something else I've always thought about is the fact that being able to have something now is WORTH spending the extra few thousand dollars of extra interest or whatever the case may be, versus suffering through dealing with your old shitty situation for another year or two or three. Obviously I'm not saying ANY interest rate is worth it but just use your brain and see what's reasonable. Same goes for a car loan. Just because your current car "gets you from a to b" doesn't mean you should hold onto it just to save yourself an extra few bucks when you could be enjoying life a lot more and not worrying about it breaking down all the time if you spend the money on a car loan. You can always pay it off early anyway. But I feel like people like Dave Ramsay would have people living in a crack house for years while they scrape together every penny into their savings rather than getting a loan on a house now and spending the extra money on interest over time. Happiness in life is worth more than just money.

Javier! Why didn’t you do this video 3yrs ago. I started following Dave since 2019. & been holding off bc the 20% payment 🤦🏻‍♀️good job on explaining the scenarios

@sterlingmarshel6299

2 жыл бұрын

because now he can justify his advice by looking back and knowing what happened - all these guys leave out their bad deals and highlight their successes its how they build their channel

wow I really have been overthinking this

I like your plan, but I’ve been looking around for coops in NYC & they all asked for 20% down payments. I decided to follow Dave’s advice. I kept on saving till I was ready. I was debt free, save 20% down payments & bought a coop for $175k. Don’t forget fees that that you need to purchase a coop. appraisal fees, credit check fees, criminal fees, application fees, lawyers’ fees. Home owners insurance at closing time. They did tell me that have your check book ready at closing time. Renting in NYC is about $1800 - $2,000.

I just closed on my house today. Buying a home was a 10-year plan. But I decided... Why the hell not?! Happy that I did. it was the right decision!

This entire argument is extremely contextual. You’ve chosen a 2-year period with an astronomical housing market spike, which makes the equity gains appear enticing and the opportunity cost seem insurmountable. This framework would be more useful if you showed Best Case, Inflation Only, and Worst Case scenarios for the same house price. I get that it’s hard being a realtor and a home buyer right now, but pragmatism can’t go completely out the window.

solid video!

I think it is all true only in the sellers market. Makes sense right now I. Oct 2022 to wait for prices to drop, while you are saving up for that 20%. All depends on the timing and the market conditions

I understand your point, but I feel the time frames you mentioned are outliers for mortgage prices. The conservative saving approach isn’t effected that much when you factor in the typical 3-5% yearly rise. I don’t think I’d ever afford a house if prices continuously rose like the two you compared.

Currently in the process of finding a lender (terrifying) deciding between building a house (terrifying) or not, while my in laws always says you don’t want to live in a city (def a city boy). And me an the mrs are struggling to make decisions, mainly from not knowing where to really start

This was a really helpful video

This video is so timely, and the title summarizes my situation for sure. I would, however, had rather you analyzed someone putting down 10% b/c, to be fair to Dave, his site says "at least 10%" not definitely 20. 20% down is in an ideal scenario. The more realistic option, especially in this market, is 10.