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If you’ve followed this site for a while, you’ll know that I’m a big fan of Dave Ramsey, his 7 Baby Steps To Getting Out Of Debt, as well has his 9 week class, Financial Peace University (which we helped to facilitate at hour church), and his next steps class, The Legacy Journey.
Dave has several best selling books, does huge live events across the country, and has his own radio and TV shows that are enjoyed by millions.
One of the things that Dave Ramsey is known for is his admonition to not use debt via credit cards or other means, and his suggestion to pay cash for everything you buy. He even suggests that you should pay cash for a home – if you can!
I was just reading some posts today about Dave Ramsey’s new home that he recently built, and it sounds like it is quite the showplace. The home and land are valued at over $4,900,000! So the question is…
Did Dave Ramsey pay cash for his new home? Or was he a hypocrite and take out a mortgage?
UPDATE: I published this article several months ago. Within the past few days Dave Ramsey actually found this post through Twitter and commented! (see below). To read Ramsey’s comment without going through the entire thread (150 comments) and to get my take on it, head on over to the updated post: Dave Ramsey Comments On My Post About His New House, His Debt Philosophy And Giving.
After another personal finance blog linked to it I checked out this real estate website talking about Dave Ramsey’s home, the cost, and some of the features of the home.
Most people have seen Dave Ramsey’shome in Cool Springs from the distance although they may not have known it is his. The house looks like a snow capped mountain but instead of snow, the mountain topiscoveredbyDave Ramsey’s home. It is fairly majestic to say the least.
Theland at King Richard’s Court Franklin TN 37067 was purchased for $1,552,000 by Dave Ramsey on April 2, 2008. For the tax year 2008 (before the home was constructed) annual taxes were just $4,938. For the year 2010, the land market value is $750,000 and the improvement value is $4,159,200 for a combined total market appraisal of $4,909,200.
A mortgage does not appear to have been recordedfor the property. That’s our Dave!
The tax record shows 3 levels in Dave Ramsey‘sCool Springs home,totaling 13,307 square feet of living area and 1,454 square feet of garage.
From what we hear Dave’s home office, including the sliding library wall ladder, is made of solid mahogany. The shower in themaster bathroom is rumored to have 18 shower heads and is larger than the jacuzzi tub. Cathedral ceilings throughout. The local who we spoke with felt the basem*nt was by far the most impressive. Full bar with whiskey barrels built into the walls, media room and several bedrooms make up thebroad lower basem*nt level you see from the distance, wrapping around the tip of the mountain.
So according to this real estate professional the home had no mortgage documents recorded, which means that it’s pretty likely that Ramsey paid cash for the land and home! He’s following his own advice!
It sounds like it’s quite the house too. Who wouldn’t want to have a beautiful mahogany lined office like that, or a shower with 18 shower heads? He truly is now living like no one else!
But if you do get a mortgage, Dave Ramsey recommends following the 25% rule—remember, that means never buying a house with a monthly payment that's more than 25% of your monthly take-home pay on a 15-year fixed-rate conventional mortgage.
According to Ramsey, the biggest benefits of building a home rather than buying include: The ability to customize your property the way you'd like to. No competition since you're working with a builder to construct a new home rather than competing with buyers for an existing one.
On a salary of $36,000 per year, you can afford a house priced around $100,000-$110,000 with a monthly payment of just over $1,000. This assumes you have no other debts you're paying off, but also that you haven't been able to save much for a down payment.
Whether you're renting or buying a house, it'll be hard to balance other financial goals if your monthly housing costs (rent or mortgage) are more than 25% of your monthly take-home pay—including property taxes and insurance. Even if rent is sky-high in your new city, the 25% rule still applies.
The Dave Ramsey mortgage plan encourages homeowners to aggressively pay off their mortgages early, however. One recommendation Ramsey makes is to convert your 30-year mortgage into a fixed-rate, 15-year home loan. Not only will you pay off a 15-year mortgage in half the time, but you'll also pay much less in interest.
The Bottom Line: The Cheapest Home Build Can Be Made With Less Labor And Less Costly Materials. Building a house yourself can save you money while giving you the freedom to customize it.
All things being equal, it will always be cheaper to build your own house than to buy the same house from a builder. You would save both the mark-up from the builder and the cost of a general contractor, which are typically a considerable percentage of the sale price of a new home.
A millionaire is somebody with a net worth of one million dollars. It's a simple math formula based on your net worth. When what you own (your assets) minus what you owe (your liabilities) equals more than a million dollars, you're a millionaire.
If you want to have a minimalist lifestyle, 36k/year is more then enough. If you want a home, family, car, insurance and some "toys", it's not going to be enough, at least in a majority of places in the U.S. But again, the term "decent" is pretty objective.
How much house can I afford with 40,000 a year? With a $40,000 annual salary, you should be able to afford a home that is between $100,000 and $160,000. The final amount that a bank is willing to offer will depend on your financial history and current credit score.
If you have minimal or no existing monthly debt payments, between $103,800 and $236,100 is about how much house you can afford on $40K a year. Exactly how much you spend on a house within that range depends on your financial situation and how much down payment you can afford to invest.
Renting a home provides much more flexibility. However, if you have returned to the office, either full time or partially, and assume you'll remain in your current job for a few years, then buying a home might be wiser.
The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals.
On a $70,000 salary in California, a good rule of thumb for rent affordability is the 30% rule. This means you shouldn't spend more than 30% of your pre-tax income on rent.
Orman explained that if you have a 30-year mortgage and you've already made payments for 14 years, you should make it a point to get a refinanced mortgage paid off in 16 years. Otherwise, if you refinance for another 30 years, you'll end up paying for your mortgage with interest for 44 years in total.
As a rule of thumb, personal finance experts often recommend adhering to the 28/36 rule, which suggests spending no more than 28% of your gross household income on housing. For someone earning $70,000 a year, or about $5,800 a month, this means a housing expense of up to $1,624.
Introduction: My name is Aracelis Kilback, I am a nice, gentle, agreeable, joyous, attractive, combative, gifted person who loves writing and wants to share my knowledge and understanding with you.
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