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re: Heard Dave Ramsey's daughter speak at a luncheon a few weeks ago
Posted on 4/20/17 at 12:21 pm to baldona
Posted on 4/20/17 at 12:21 pm to baldona
I've never dug in too deep to Dave Ramsey's financial plan, but from what I understand, the 'problem' with it is this:
- no credit cards, cash only
- no credit cards mean no credit (credit score of 0)
- no credit score means no borrowing power
So you're supposed to either:
- have enough saved up to pay cash for a house right out of college
- rent a house until you save up enough cash
- live at home with your parents until you save up enough to pay cash for said house
It's a nice goal, but as many have said, most millennials don't have $150,000 saved up to be able to afford to even buy a starter home without debt/credit. Even if they graduate without any student loan debt, which is pretty rare these days.
- no credit cards, cash only
- no credit cards mean no credit (credit score of 0)
- no credit score means no borrowing power
So you're supposed to either:
- have enough saved up to pay cash for a house right out of college
- rent a house until you save up enough cash
- live at home with your parents until you save up enough to pay cash for said house
It's a nice goal, but as many have said, most millennials don't have $150,000 saved up to be able to afford to even buy a starter home without debt/credit. Even if they graduate without any student loan debt, which is pretty rare these days.
2
Posted on 4/20/17 at 12:30 pm to LSUGUMBO
That's where Churchill mortgage comes in. I believe they still do manual underwriting for people with no credit.
This post was edited on 4/20/17 at 12:33 pm
Posted on 4/20/17 at 5:06 pm to LSUGUMBO
quote:
I've never dug in too deep to Dave Ramsey's financial plan, but from what I understand, the 'problem' with it is this:
- no credit cards, cash only -
no credit cards mean no credit (credit score of 0) - no credit score means no borrowing power So you're supposed to either:
- have enough saved up to pay cash for a house right out of college - rent a house until you save up enough cash - live at home with your parents until you save up enough to pay cash for said house
Of what you have posted here about DR only one thing is true, no credit cards.
He has no problem with anyone getting a home mortgage, as long as you have a 20% down payment, and the monthly payment is no more than 1/4 of your take home pay, obviously if you are in the top 1% of earners it may not apply.
I had never had a credit card, borrowed money or did a single thing to build credit before I purchased my first house, I worked with a small local lender, and had about 25% down, and good references, no idea what my credit score was. I did this long before I ever heard of Dave Ramsey, it just seemed like common sense.
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