@2:15 Dave attempts to put the caller on hold, which would be his habit. But, then, he remembers this guy is not on the phone. Nice recovery Dave!! Way to be smooth!!! I like it.

I would wait until you have 20%down... That pmi insurance is a rip off.

A 20% deposit for the average house in my town is $100,000... Could say I've been saving pretty aggressively, whether I stay here or not!

Lets say it is $75/month per $100k borrowed. I rather pay that than to rent even an extra year...compare even a $1k rental that's $12k a year versus paying $150/month in pmi. Even if you're paying the pmi for 5 years that's only $9k compared to the $12k u spent renting.

20% down is much safer. Your going into the loan with a good chunk of equity already. That way if life takes a turn for the worse you can always sell the house and not be upside down. 3-5% down first time home buyers that's not always the case. If something happens where you can't afford the house anymore if you have no equity and the market went down your gonna be in a bad way. Vs if your income dropped and the market went down slightly you can still pretty easily walk away from the house without too much trouble. Kinda what I've heard from lessons from the last crash

At 5 percent down you can have pmi removed when you've got enough equity. . My rent was going up more than my pmi payment every year. It would have been 5 more years to get to 20% plus the houses are going up 5-9 percent anually. So it was worth it for me

Bought my house before learning about Dave. My PMI is 80 bucks a month. Personally I think it's robbery, but paying my mortgage down 20% seems to be going quickly and I love owning my home. He was probably ok with this guy doing it because he has done so well with his finances already.

Great video to find. I'm 24 with slightly more saved and make a bit more and have been afraid to buy. I might be rethinking.

PMI is not that much $$$. Around $45 a month on a 150K mortgage. $550 a year until your home reaches 78-80% of value(just make sure when getting your mortgage PMI IS NOT for the life of the loan). If you get a 30 year mortgage and pay on it like a 15 year, PMI will be gone in a few years. So your basically paying $1100-1650 in PMI.

One thing with not putting 20% down is that if you have to get out of the house quickly, you have to come up with cash to exit. Real estate agent already takes 5% to 6% off the top, then factoring in other closing costs if you don’t have at least 10% you can be in a bad situation with no real “exit equity”

it would have been funny if Dave reached for the mute button, pressing it a few times to try to mute him, but couldn't be cause it was in studio!

PMI does NOT drop off with an FHA loan. They changed that in 2013, the only way it will come off is if you refinance which will cost you closing cost.

In order to avoid PMI one can always try working with a credit union to get primary and secondary mortgage. Primary is usually for 80% of the mortgage with much better rate and the second loan for the remaining amount which usually comes with higher rate. Sometimes there is no way around than paying for PMI.

I say he wait til another housing crash, people don't study history , these homes are overpriced and then they go up and then there a bust...never buy at the top of the boom (like most people) buy at the bust and pay half for the same house..

So in my situation, our rent is 1650 and homes range from upper 200s to 500s where I live. Really expensive. Our debt is about 300k in student loans and we make 137k currently. Should be making 145k next year based on promotions and raises. We are seriously outgrowing our 1000sq ft apartment and I cant work on our cars where we live which bugs me for saving money. 1600 a month has never really been an issue to afford making what we make it is just that we know it may take 5 years to pay the loans off shouldn't we just buy a home with less 1500 in mortgage? We feel like if it's going to take us 5+ years we might as well put money into a home that we can have equity in instead of throwing it into rent that we will never ever get back

Correct me if I'm wrong but there is one good use for PMI: If you buy the top of a bubble and it loses a bunch of value quickly if you short sale you don't have to pay the remaining balance. Only if you still have insurance on it, basically while paying PMI. I bought in a big bubble so it's a fringe benefit.

You have to refinance it once you get it to 80%. The PMI doesn’t just drop.

Supposedly if you have *outstanding* credit score and a good home loan they will be nice and waive the pmi insurance. My credit score is 790, so I'm looking forward to no stupid pmi.

JULIEN MUH MAN. This is exactly where I am right now in baby steps and needed this video. ty!

I relate so much with this guy. I am 24, debt free and have $7,500 saved as a down payment for a house. I am actually surprised that Dave said it was ok for first time home buyers to not put 20% down and pay for PMI.

PMI is an "Extra kick in the face" -Dave Ramsey : (

He has 5k for a down pay if he buys now. What’s he getting, a trailer?

People see the big number but trust me buying it at one shot is far more beneficial. What if income messes up and you still got a house payment? Making money is easy it's all about your expenses. Paying off a house is something that can take you half your life, how nice would it be to save up 400000 in about 8 years than to pay it off in 28

I think the other key point is to have your mtg payment at no more than 25-30% of your monthly take home pay. To reach this number you might have to put down 20% anyway in some cases.

25 years old?!

PMI is 100% interest

navy fed doesnt have PMI if you get approved for their mortgage loan

Currently in baby step 3 but I'm wondering that a 20% for a house here in Miami is gonna take almost 2 years to save up, 90% of houses here are 300k and up and to make things worse they are old small homes in horrible neighborhoods, I guess I'm gonna have to look for homes an hour away from work.

I learn alots​ about this show!

He should look into other types of loans. I just got a USDA rural development loan. 0% down kinda like a VA loan. No pmi but there is a .35% fee every month kinda like pmi only much cheaper. Annual premium it's called.

Learned something new

Funny PMI , company worried you wont pay so they give you a extra payment! Lol

Not if you buy with NACA

Im a refi banker at quickenloans and are insurnace ratings are so good(because so few of are homes foreclose) that we can offer lender paid mortgage insurance. So the cost of the mortgage might increase by 1 point(depending on credit) but its so worth it if you plan on being in the home for years and saves my clients thousands on there payments

Basing the decision to buy or wait on PMI is silly. The one year cost of PMI on a $200,000 house is just $1728. While you rent you don't get ANY equity, so you lose about $12,000 per year. If you buy, you pay $150 monthly in PMI, but you gain hundreds more than that in equity.The math doesn't lie, buy don't wait.

If i own a lot worth 110,000 and get a construction loan for 300,000 does the value of the lot help me not to pay for pmi?

Should I put money down when buying a house using a VA Loan? There is no PMI and no down payment required...

What about 2% inflation? Do you really need to put down 20%. You'll probably lose more from inflation than paying mortgage insurance.

FYI- you can’t buy a second house with less than 25% down. No mortgage company will do less on a second home

I'm saving up for $100k till I move out into a house. I don't believe in renting. You're so far behind the game if you rent. All you'd be doing is putting money in someone's pocket. All my friends have a place to rent, but I still live with my parents waiting to save for $100k and being debt free. I can do so much with that kind of money. It sucks not being independent for the time being but I know it will pay off in the end and I'll only be 28 by the time that happens.

Clear! First time buyer...you don't need a 20% ..

I'm only putting down 5% and my lender isn't making me pay PMI. Some places have those incentives for first time home buyers.

Time is money. You can use that time to save the 20%. Or you go now but you pay a premium

Somebody that is much better with numbers?!? How much house can he afford with that income and downpayment? $70k and $5k?????

Okay so curious. Dave says there is a myth to paying off house early. People don't want to because they lose the tax advantage. I believe his example was send 10,000 to Congress to save 3,000. Or somethin like that so pretty much it's stupid to not pay it off. But in this situation dudes asking should I but now or wait to put 20% down. He says wait. If you wait you gotta rent for another year or 2. 1,800 for pmi ins for the year is waaaay cheaper than rent for 2 years. Why not just go ahead and pay the pmi ins it's way cheaper

Guys still trying to save for a 20% down payment to this day

20% down - its stupid to pay PMI!!!!

If I want to buy a property for 250k and I saved 200k , can I get a loan for the 50k if I really want to buy this property and then I'll rent it out to cover the monthly loan expenses

Wasn’t expecting that voice

why not rent until you have enough money to pay cash for the house? that's what i would do.

I thought u said avoid mortgage because it's stupid... a borrower is a slave to the lender!!!

Why not just save and buy house straight up?

21 years old and saved 30K! About to buy a house following Dave Ramsey steps!

I see people who make 50k a year sbd have houses.... so why can't he

This is stupid as soon as u can afford the payments I would get something nice because while your waiting for your stupid 20 percent house prices will just go up

Is he single? 😅

Just to add, you could be eligible for zero down payment financing upto $400k+ with no risk if you satisfy certain criteria that have just been added to the housing bill.

this guy's not some money wiz, he's just a high earner. easy to accumulate wealth when you're not saving at a snail's pace. at 25 most are still in school or making half what he is.

He looks 33.

Build up and just buy the house flat out CASH ...

I'd rather just save enough so I can just buy the whole house upfront instead of paying monthly.

I’m 32 but I look 25, I’m good on being poor and not looking like that dude.

Guy needs a diet. No point being a millionaire at 40 If dead from heart attack

Only fit, hot guys should wear that type of shirt.