The mortgage a bank approves you for and the mortgage you can actually afford are TWO DIFFERENT THINGS
Dave Ramsey, an American trusted voice on money and business just explained the differences between the mortgage a bank approves for a person and the mortgage you can actually afford.
Dave Ramsey is America’s trusted voice on money and business. He’s authored seven bestselling books: Financial Peace, More Than Enough, The Total Money Makeover, EntreLeadership, The Complete Guide to Money, Smart Money Smart Kids and The Legacy Journey.
Dave Ramsey has been more successful than just about anyone at encouraging a diverse audience to eliminate debt and live a more purposeful life.
The mortgage a bank approves you for and the mortgage you can actually afford are TWO DIFFERENT THINGS
Just because you could s t r e t c h to make the payment each month doesn’t mean you can afford the house.
I want you to own your home, not let your home own YOU. A mortgage is the only type of debt I’m okay with. Just slow down and make the smart choice.
I recommend a 15-year, fixed-rate mortgage where the payment is no more than 25% of your take-home pay.
You need the other 75% of your income to cover the rest of your expenses and to give you the margin to begin building wealth.
Trust me on this one, the great thing about a 15-year mortgage is that it’s paid off in 15 years.
Yes, the payment is a bit more each month compared to a 30-year loan, but if you dig a little deeper, that 30-year mortgage would cost you a TON more in interest.
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We’re talking hundreds of thousands of dollars more compared to a 15-year loan.
The goal is to get out of debt as quickly as possible, not stay in it longer.