Dave Ramsey’s Financial Peace University Week 12

If you are just tuning in I’m taking the Dave Ramsey Financial Peace University classes and reviewing them each week. If you missed any you can catch them here;

The Class

This week’s class was on Real Estate and Mortgages. I liked this class a lot. Dave has a ton of great information about real estate since he’s been in the industry his whole life. He has lots of funny and interesting stories.

Dave is anti-mortgage, no surprises there. He would love it if everyone paid cash for their mortgages but he acknowledges that that’s not going to happen. He does encourage everyone to pay off their house early, after paying off their debt and saving for retirement.

In this lesson he gave tips for selling your home. Things like to clean it perfect, including the windows and the front door. Basically life in your house as if it was a model home. You are moving anyways so pack up most of your personal belongings. You want the new buyer to feel like it’s their home as soon as they walk in. That won’t happen if you still have your ceramic rooster collection on display. He said to have no more than 2 gadgets on the kitchen counters.

He also said to get rid of any pets. Move them to grandma’s house while your house is on the market. He said that evidence of a pet will knock $10,000 off the price. Also bake some bread or light a candle before the showing to make the house smell inviting.

Of course he also talked about buying a house. He said to always buy in the bottom price range of a neighborhood. In other words, you want to own the cheapest house on the block. Why? Because location is the most important part of real estate, so a house in a good neighborhood will appreciate faster and hold it’s value better than a house in a less good neighborhood.

He also emphasized that a house must have curb appeal. If you are selling then spend some time on the front of your house. If you are buying keep the curb appeal (or potential curb appeal) in mind. It’s something you will want to have later. Another must have in a house is a good floor plan. The condition of a house can always be fixed, but a bad floor plan very hard to change.

Of course, Dave doesn’t want you to finance your house, but if you are going to then he says not to take a mortgage payment bigger than 25% of your take home pay. Also, always put at least 10% down on a 15 year loan. He goes on to explain all the different types of mortgages but I won’t bore you with that today.

The Sharing

Everyone was talking about their home buying experience, and with the wild market swings it made for some interesting conversation. The hosts have several properties so they went into some detail on those and how happy they are that they’ve paid off the ones they’ve paid off so far. They are also working on paying off their primary mortgage.

In last week’s review I said how the sharing portion of the class has kinda turned into a support group for The Pink’s and this week Mrs. Pink joked that we’ve become her weekly therapy session. I thought that was pretty funny.

Again, I really liked this class. It was one of my favorites. In fact, I really wasn’t feeling like going at all that night. I had a rough day and I really just wanted to put my pajamas on and watch a movie or something. As we were leaving the house I said to my husband “If I didn’t have to write a review I probably would just skip this lesson”. But I’m glad I didn’t skip it. Definitely worth showing up for.

Next week: The Great Misunderstanding.

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4 Responses to “Dave Ramsey’s Financial Peace University Week 12”

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  1. Sun says:

    My uncle purchased a house in the same price range as my parents. My uncle purchased in a neighborhood with mansions and other big real estate. My parent’s home has doubled in price, while my uncle’s place has tripled in price. Location location location.

    Unfortunately for us, based on our income and Dave’s 25% suggestion with 10% down… we won’t be able to mortgage place in a good neighborhood with good schools. We have to live out of the county, live in a dangerous neighborhood, etc.

    • Ashley says:

      Ah.. perfect example of why location matters.

      I agree that the 10% down 25% of take home guideline doesn’t work for everyone. I would stick pretty close to the income guideline but aim for more down if necessary to get the location you’re after. In fact, I’m surprised he didn’t recommend 20% down as a minimum.

  2. serena says:

    I was going to comment, too, about that advice to stay within 25% of your income. That just isn’t feasible in all markets. I live in the Washington DC suburbs, in Maryland, and home prices are still higher here. We used to live in a condo in a not very good desirable school district, but 1 year ago we bought our current house (see my housing blog at http://rehab2fab.blogspot.com) because of better schools. We put 10% down. It is higher than the 25% that Dave recommends. Our condo was probably in that 25% range. But with 3 kids, sorry– a 2 bedroom condo just isn’t gonna cut it.

  3. What did I tell ya? The best part of FPU is the Small Groups.

    I am excited that my church may be hosting its 4th round of FPU in February. I can’t teach it enough!

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