The Dave Ramsey Effect on Richmond VA Real Estate
The Dave Ramsey Effect on Richmond VA Real Estate - The other day I was on one of my various social media sites and a fellow agent posted about having three cash closings in the last month. The agent then asked, "Is this a new trend? With Interest rates so low, why not use financing?" As I watched people make comments about how the client should have used financing, maybe they were leveraging the best deal with cash then planning on refinancing, and so forth, I had my own comment: "A lot of Dave Ramsey followers out there. Maybe people are just buying what they can afford with cash." Huh, I surprised myself with my own comment as I had not given much thought about the Dave Ramsey Effect on Richmond VA real estate
Dave Ramsey has grown in popularity over the years and, I must admit, I like many of his ideas. I particularly like his notion of the snowball method
. This is where you pay your least expensive debt off first, then once it is paid off you take that money PLUS the money you were paying for the next debt and make a larger payment. You keep repeating this until you are debt free. I don't know about you, but I love those words: DEBT FREE. As a friend of mine commented after me, "Debt is not a tool. Cash is King!"
We have become so accustomed to using plastic for payment and taking out loans, that many just do it even if they have the cash to pay for it free and clear. Why is that? I am not judging anyone here, I am notorious for not carrying any cash with me and only using credit cards because it is so convenient and we all like easy. Staples Easy Button, anyone? Isn't it a bit ironic that you can't even obtain a mortgage without having a great CREDIT score. Essentially you must carry debt in order to get a home! (Again, no judgement here. I have several mortgages with a primary and some investment properties)
Should I Pay For My Home with a Loan or with Cash?
If you have the funds readily available, you are now probably asking yourself, "Should I pay for my home with a loan or cash?" Unfortunately I don't have an answer for you! As a Richmond VA Realtor
I am here to guide you with the sale or purchase of your home. I don't speak about things that are not within my scope. I would advise you to consult your financial advisor on a matter such as this. What does Mr. Ramsey have to say on the subject? His website has these three "rules":
* Can you make at least a 10% down payment? (It is noted that 20% is preferable)
* Can you afford a 15 fixed rate loan?
* Can you keep the house payments at or below 25% of your monthly take home pay?
If you answer yes to all three of these, Dave says you can afford a house. If you say no, you are better off to wait.
While I love this, it wasn't the advice we followed in making our real estate purchases. We chose a different route to financial freedom with income producing rental properties. I am confident Dave would say we should have put the money we used for a down payment on the rental units and applied it towards the principal of our primary residence. I can't argue with that thinking, yet that's not what we did. I believe it all comes down to your personal WDYWFY. What Do You Want For You?
Tell me: Do you think there is a Dave Ramsey Effect happening in real estate?
Richmond VA Real Estate Agent
Looking for a Richmond VA real estate agent
who respects your financial decisions? Give me, Shannon Milligan at the RVA Home Team
with Keller Williams Realty, a call today! No matter if you want to pay in cash or use a loan, I am here to guide you to your home sweet home!