Table of Content
- The Home Buyers Guide for Buying the Smart Way
- Get helpful advice delivered to your inbox.
- What Salary Do You Need to Buy a $400,000 House?
- "No One Is Talking About This!” - M.I.A - #043 - Stay Free with Russell Brand
- Save 3 Percent of a Home’s Purchase Price for Closing Costs and Prepaids
- Find a “killer” Real Estate Agent.
- Realize that renting for a little longer is not a sin.
- Use the 25% rule to see how much house you can afford.
Sure, you might get sticker shock while house hunting. But buying a house as a millennial is possible. You’re legally responsible for any papers you sign. Read every document carefully and ask your real estate agent to explain anything you don’t understand so you don’t end up in hot water. When we compare ourselves and our stuff to others, we’re struggling with contentment. Contentment can make us rich—and it can keep us from making bad money decisions.
Your numbers could be totally different. The biggest variable in the whole savings equation trying to save the 20% is that you’re going to pay that three-bedroom average we talked about which is $2,147. I’m the old-school dude preaching new-school thoughts. Wisdom, energy and passion is a freaky combo.
The Home Buyers Guide for Buying the Smart Way
A three-bedroom rental is $2,147. If you’re looking at a median home that’s $375,000, these are the post-2021 insane bananas growth number and don’t look back with regrets. It can still look good for you moving forward. The reason I’m not going to use the numbers for 2021 is because that’s what people are using right now to debate Dave, and any idiot yelling can make that look good.
I understand why you could feel that way, so let me do the math for the “it’s safer” argument. What if home prices go down in the next 4.5 years? First of all, it’s not going to start immediately because it’s still bananas out there and there are 20 and 25 people writing offers on every single home. Prices have to go up for at least a little while longer, but I’ll do it.
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Buying a home is the easiest way you can accumulate any stability since you have already made your largest monthly payment to rent. If you’re one of those people who has a nice, slow and steady life that you’re very happy with, maybe you’re getting a 3% salary increase. Are you telling me that’s going to cover rent? If the rents are raised even as little as 4%, you can’t ever save anything.
If you’re lucky and you’re living at home with mom, plug-in zero while you chill in the basement. So you're ready to buy a home -- perhaps upsize to a larger property or move to a neighborhood with more restaurants and amenities. If you're currently renting, you may have spent the past few years socking away funds to serve as a down payment on that new home.
What Salary Do You Need to Buy a $400,000 House?
I’ve been saying that although I love the care and concern that Dave Ramsey has for all his clientele. He’s helped millions of people get out of debt. For most people following these old-school financial tips, it can cost you a ton in this new real-world economy of low-interest rates and out-of-control skyrocketing rents. I’ve even mentioned that in previous episodes.
This is about you and what you can do in nowadays’ market to help yourself. I’m not saying to go all the way to the other side, but I am saying that cash is king. If you’re leveraging this smartly managed debt, you do have the options because you’ll have more cash and you’re working with a low-interest loan. I know that statement freaks a lot of people out.
That means you can feel confident buying a home that won’t bust your budget. Just keep your mortgage to 25%—or less! —of your monthly income and don’t borrow so much that you can’t breathe if life changes down the road.
You may even make several offers before one gets accepted. Find homes you like online and send them to your real estate agent. Then, they can use the Multiple Listing Service to find more homes that check off the boxes for you.
Life is going to happen in the years you occupy your home. Before you take on a mortgage, look ahead and consider events that might increase your living expenses down the road. And for you married folks, make sure you and your spouse look at the resultstogether. You need to be on the same page when it comes to your budget and what’s realistic for your money situation. After all, shopping for your “home sweet home” will feel very unifying and exciting once you both have a shared vision.
He helps people feel better, but one of the ways he does it is by you adopting a safe and foolproof system. I was going to stay still stay safe, but it’s not as safe as the ultimate conservative, but it’s still very safe. Especially when we’re talking about the have-to that you already paid for that you can manage this debt.
Blanket statements are for the undisciplined people who need uber structure or they’re going to run up their credit cards or spend money in a stupid way. If you’re saving for 20%, you don’t even start that process. That’s where your rent money goes. You can buy that asset for 5% down, but many of my buyers buy for 3.5% down. If you’re still out there and you’re still seeding because you love Dave Ramsey and these numbers didn’t go with you, just a little moment of pause.
Your real estate agent has helped dozens of first-time home buyers. They can help you discern your needs and wants, set realistic expectations, and show you houses that meet your criteria. You may know a lot of real estate agents in your area. But keep in mind, not all agents bring the same knowledge and experience to the table.
Realize that renting for a little longer is not a sin.
Find the resources that can help you because if you read this entire episode, you are serious about this. That means I know that you can do this. They call me and they grill me with the math questions.
I’m talking about leveraging the loan for your have-to payment that you have to make every month, so you can have some extra cash for yourself to handle the ups and downs of life. This doesn’t come from a risky get-rich-quick scheme. I’m not trying to sell you a seminar and tell you to come and buy my investment properties.
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