Dave Ramsey's Best Home Buying Tips

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Get a 15-Year, Fixed-Rate Mortgage

Dave Ramsey advises getting a 15-year, fixed-rate mortgage to save you big money in interest down the road. He suggests steering clear of a 30-year or variable rate mortgage. “When you have a 15-year mortgage from the beginning, you won’t be tempted to use that money for something else. You’ve got built-in accountability to get your house paid off fast!” Ramsey says.

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A Monthly Mortgage Payment Should Be 25 Percent of Total Take-Home Pay

Ramsey urges the importance of knowing how much you can afford so you don’t wind up in financial trouble. To figure this out, first add up any income you bring in each month. “Let’s say you bring home $2,400 a month and your spouse makes $2,600 a month. Your total monthly take-home pay would be $5,000,” he says.

Next, multiply your monthly take-home pay by 25 percent. This will give you your maximum mortgage payment.

“If you earn $5,000 a month, that means your monthly house payment should be no more than $1,250.”

“You could afford these options on a 15-year fixed-rate mortgage:

$187,767 home with a 10% down payment ($18,777)
$211,238 home with a 20% down payment ($42,248)
$241,415 home with a 30% down payment ($72,424)
$281,650 home with a 40% down payment ($112,660).”

Here are 10 important things to consider when buying a house.

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Not All Real Estate Agents Are Created Equal

“You may know a lot of real estate agents in your area. But keep in mind that not all agents bring the same knowledge and experience to the table. Don’t work with an amateur just because they know your cousin’s sister-in-law’s best friend from 10 years ago,” advises Ramsey.

He suggests interviewing a real estate agent. Look for the following criteria: