Welcome back for our Week 8 check-in on our Financial Peace Journey.
Financial Peace University is a weekly course that takes place over the course of 9 weeks; if you're interested in checking it out, you can go to his website www.DaveRamsey.com and search for nearby classes. We're taking ours through our church.
Real Estate and MortgagesBuying a home is about the only debt the Dave Ramsey will tolerate (for a little while). He still doesn't encourage it, but recognizes that most people don't have the willpower and patience to pile up enough cash to buy a their first home outright.
His basic tips when it comes to borrowing for a mortgage are
- Remember to hate debt; don't borrow more than you have to.
- Make sure the payment is not more than 25% of your monthly take-home pay.
- Get a fixed-rate 15 year mortgage.
- Put at least 10% down.
That was great at the time because we didn't have to bring any money to the table, but when we've looked re-financing to take advantage of lower rates, there isn't enough equity involved to do so without bringing a few grand to the table. Fortunately, we're not upside-down.
Since we're not unhappy here, and the payment isn't killing us, the plan is to get the debt paid off and keep cash-flowing our renovation projects. When we get my business paid off in a few years, we can pile up money for an appropriate down payment on our next home (if not do the 100%-down plan).
At that time, we'll assess whether there enough is equity in this house to sell it. Luckily, our proximity to downtown Columbia and the University of South Carolina means that renting the house is an option as well.
What financial victories have you accomplished this week? Are you happy with your retirement savings? What could you do to increase or improve your situation?
Want to catch up on our financial peace journey?Week 1 Check-in
Week 2 Check-in
Week 3 Check-in
Week 4 Check-in
Weeks 5 & 6 Check-in
Week 7 Check-In