Our Mortgage Is Half our Income! 

I am regretting not investing in stocks ever since but still grateful i kept money in the money market. With about $200k maturing soon, i plan investing in the stock market. What stocks should I look into as a newbie to safely grow my money?

25% of your income with a 15 year mortgage is a pipe dream for most people these days.

150 a week is CHEAP for daycare

I completely disagree with selling. It's a season. In 5 years, both kids will be in public school and your income will be slightly higher (hopefully). Be on a strict budget and in 5 years you'll be fine.

10k a month, no cards, no debt. They can easily make it work. For some people, pay 40% is OK for them.

For everyone that's curious why they can't make it work it's because they don't actually make 10 k take home. The husband is self employed. I work at a bank and 99% of self employed individuals have no clue what their real net income is. Most of them quote gross or are way off. They probably make less than they claim. Would put money on it that they bring in way less.

I think selling the house is bad advice. Either they are lying about their income or they spending money too much.

They still have 6000 per month from which to live! The heck. That's PLENTY of money.

I don’t understand how they can’t make it…they net $10,000 a month and mortgage is $4000 a month. So where does the $6000 go aside from child care? That’s a lot of extra money that should be sufficient enough to live off of each month.

So they net 6k/month after mortgage. It's the same as someone saying they make 100k gross per year with no housing expense. They don't have a housing problem, they have problem with other expense. selling the house is not a solution.

I don’t think they understand some states you can’t find a house that’s around 25% of your income. It’s possible yes but not everyone can do that

Something they didn’t mention is the issue of using GROSS income to get approved for a mortgage. As a former lender, something didn’t feel right about knowing that I was able to approve someone making 4k gross for a 2k mortgage when they realistically bring in 3.2k.

This caller is starting to understand that you must live BELOW YOUR MEANS to, eventually, live debt-free.

Downgrading now when they net 10k a month and the house mortgage is 4k is not the answer.

540k home after selling fees and cost around 7% of the homes worth. thats 40k gone from fees almost. 3% to the buying and seller agent. u would breakeven on the home and pay 0 in taxes and also make nothing.

How are these pearls possibly broke even after paying their mortgage they are still left with $6,000 a month. After I pay my mortgage, I’m left with that 2,350 a month and I’m doing just fine.

Wow, our families total monthly expenses are less than this callers mortgage! Live beneath your means people….this is the way!

I lost over $80k when everything started to tank. Not because I was in an exchange that went belly up. I was just stupid to hold and because that's what everyone said. I'm still responsible. It just taught me to be a better investor now that I understand more of what could go wrong. It took me over two years of being in the market, I'm really grateful I found one source to recover my money, at least $10k profits weekly. Thanks Patricia Annie Brooks

I live in a house that is worth over $500k...but I bought it 10 years ago for $235k. The answer to real estate inflation is clearly a time machine.

Buckle down and pay the mortgage. You have plenty of wiggle room.

I knew these calls would start coming in 🤦🏻‍♂️

in today's economy with interests rates increasing many households are not under 40%. and that's just reality for many atm.

The ‘House poor’ topic always gets me, in relation to my parents’ situation. I found out just before my dad passed away that my parents’ mortgage payment was 40% of the household monthly take home income and that he didn’t have life insurance. When my dad passed away, the mortgage pmts went up to 62.5% of my mom’s take-home pay…post-retirement the mortgage is 184% of her retirement income! I also found out the mortgage will finish five years after my mom retires. My mom retired last year, is house rich but cash poor, doesn’t want to sell the house and has little investments and retirement income to last the rest of her life. If the mortgage was more manageable, her and my dad could have invested much more in their retirement. Moral: Get life insurance on both home owners’ lives and make sure your home pmts are ideally no more than 30% of the lowest earner’s take home pay.

Mortgage lenders will lend far more than a buyer can afford. My husband and I used to think that the lenders would only lend what they knew we could repay, but they don't. We got caught once in a house that drained our savings and it was hell

Depends on the city too. Some cities it’s impossible to pay only 25% on housing!

$150 a week is cheap, I pay $325 for toddler & $375 for infant discounted.

It seems like half of Ramsey's callers problems begin with the sentence "We bought a house"

Young couple bought a house in San Antonio for $500k its crazy

When we purchased our home in the early 80's, we were in over our heads too. We stuck it out. And it seemed forever for us to see the promises of home ownership. Now I am glad we did. You sacrifice things like eating out and luxury vacations, in favor of the necessities. 40% of a $500000 income is not as hard as 40% of a $200000 income. Food, household goods and medical does not cost more because you make more.

Toronto area most would consider that rookie numbers.

I guarantee she was the driving force behind the move. That's why she said "we"

40% isn't that bad!!! Not everyone can do 25% They didn't mention realtor commission! Don't sell!!!

She is lucky as hell to have child care @ 150 a week, netting 10K a month, child care is about to cost me 2K a month!!!

*If you are not in the financial market space right now, you are making a huge mistake. I understand that it could be due to ignorance, but if you want to make your money work for you...prevent inflation*

50% of $10k is different from 50% of $1500. They spend their money in stupid places.

Have they considered selling one of the kids?

In this market 500k is not too much house. The Ramsey equation to buy a house only works for high income earners

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I got so lucky I bought a new construction in 2020. Which is now 25% of my take home now …

What? After paying my mortgage I have 3k left. How are these people having a difficult time with 6k? And I’m in los angeles btw.

Nothing in this call is correct, plus wait a little and refinance with a lower %

We just bought our house on 2/15/24. Its 40% of our net. We budgeted and should have $2500 extra each month. We have no debt and a net worth of about $500K (34 and 36 years old). Yeah its not the 25% cost we wish it was, but this is the housing market. There are no homes less than $300K and I dont think thats going to change anytime soon.

I recently found a house that I would love to get! Right size, nice layout, good location..BUT it would make us house poor. My husband said we could get the house, but not have money for any extras. I chose to keep our current home and enjoy the extras 😊

$6k left over after mortgage and they are struggling? They should of dove into their budget

They don't have to worry about capital gains with only $41K increase on the value. If this is their primary residence, they don't pay anything up to $250K gain.

Wow, they already had a home! They used their equity to pay off debt. Bad move! Your house is worth a dollar! If yours has gone up in value so has every other house!!

Being house poor is not horrible. It means better schools for the kids, a safer neighborhood. They should focus on increasing income now, even slightly. In ten years the father will be handing over the shop to the son. The kids will be school, and mom can get more lucrative employment.

Why did they buy a home in the 500 thousands? She said they're maxed out. Look for a home about 300 thousands they would be more comfortable as a family.

The issue is the economy people have no choice but to be squeezed tight. There is no reason a family making 10k should have a mortgage that is 40% of their income but unfortunately decent housing is so unaffordable that they have no choice

10% Down payment + 30 year Mortgage + 35% of total take home as monthly mortgage = practical situation today!

Honestly their situation isn't bad... 10, 000 per month and the mortgage is 4,000? It's not bad considering they can increase their income over time... The 4,000 hurts now but over many years as career continues and you get raises, that will be a deal. Keep the home and make it the forever home

Guys you are missing the 6% commission to be paid to realtors ? . She is not gaining anything. But once house is sold the rent they pay, doesn’t help build their equity as well.

Good godd, $500k?? My wife and I make the same and we still chose a $200k home during 2020, while my other family and friends grabbed those $420k+ homes, now they all regret it and are struggling bad. I tried to warn them about taxes increasing as well. Oh well, we fine still with our $1400 mortgage 🙃🙃

We need the fed to bring rates up to 10%. This will cause mortage rates of 13% plus. Will this destroy the economy? 100%. However this will drive house prices down at least another 30%. How did i arrive at this conclusion? Because the median home if it stayed the same price of around 410K, would yield a payment after 20% down of nearly $3,700 before taxes/ insurance. If you include tax/insurance you would be at 5K payment ( for median home!) Last time i checked no bank can write a loan with a payment that equals 100% of the median household income take home pay!

they earn 10k and have a 4k mortgage. Does that not leave 6k? What's the problem?. This is clearly about choosing a certain lifestyle to afford a certain house

We bought a house at the same year and the mortgage was almost 70% of our income. We barely had any furniture, lived frugally and even made extra payments (we didn't have kids back then though). Now looking back it was the best decision we've made. Her situation is well under control if she adjusts her family's spending habits. If she sells the house, when she decides to buy again, there will be more stress in today's market.

I just hope Dave reviews these calls.

If the house was worth 540k, that's and 8% gain on 500k. Not 40%. And with 40k profit, there's no capital gain tax. Married people can take a 500k exemption. More then a year, capital gains won't be based on your income.

Dave likely would have said, it was a dumb-butt purchase but so long as they can get tough, ride it out

My house is 130 years old, it creaks, it sags some places, slapped a new roof on it and so thankful that for the years my wife is stay at home as we raise our children that our mortgage is only a small part of what we earn

Bought in 2014 and we got a mortgage for less than 25% of income..house is paid off now. These days unless living far from a city thats going to be tough for the majority of people since home values have skyrocketed.

According to Dave's plan. Its 25% on a 15 year mortgage! They have 40% on a 30 year. They can afford about a $280K home if you listen to Dave.. Good luck...

Suck it up for 2 years and make the payment and live poor. Build equity and Refinance for lower rate in two years.

Who told people to over pay for their over priced homes?

What was wrong with the first house??? One of the most financially stupid terms that has become common to say is "starting home". You can start and end with one home that isn't at the top of your approval limit. This financially stupid decision is celebrated, unfortunately. Smh.

she should know now that her realtor and loan officer are not the best advisor and should not trust them anymore. My loan officer told me how much I can afford but discouraged me to max out.

25% for mortgage is that after pmi utilities wtf in this day and age

Where the heck do you find daycare at $150 a week… I truly need to know this. lol

When getting approved for, they will qualify you up to 45% of your GROSS income, which is really like 60% of your take home pay. Its absolute criminal!!

She is right. Buy what is in the budget YOU put together, not with the load the bank is willing to give you. If you buy small and keep it, you will thank your future self. I'm in central Florida and my mortgage on a 3/2/2 single family house with a yard is less than a studio apartment in the same area. That's because I kept the small house after 20 years and didn't upsize with my income. Granted it should have been paid off sooner, but will be in far less than 30 years.

I spend half of my income on cocaine.

If this is the forever house, I don’t agree with selling for a cheaper mortgage. They make enough money, it really just depends on their priorities/ lifestyle beyond their mortgage. We personally own a farm that has a mortgage that’s about 50%. We don’t really enjoy travel, and have minimal expenses beyond our mortgage. We are doing just fine.

The lesson here is the same for homes, cars, or any other large purchase. Refrain from letting someone who makes more money from you spending more money decide your price on anything. You must decide what savings or future earnings you can comfortably accept for what you're buying. Don't let the sharks convince you they won't bite ("I'm looking out for you..."). You're bleeding money ("you can afford this...").

It is not bad at all! I payed over $800 for rent when we made $2000 a month after tax. The problem was that we could not get anything cheaper. That was years ago. We got more money now and a low mortgage rate.

Making 72k a year they approved me for $750k when rates were sub 3%. I nearly fell out of my seat, and went with less than half of that amount. Not complaining but do wish I would’ve done even less tbh.

This show is literally dumb. Couldn’t continue watching. There are people in California who make 10k but there mortgage is 7k and they still make it work. Rent rooms do anything. But her income shouldn’t be a problem

I’m sitting on the sidelines right now waiting for interest rates to change for this exact reason, a very average two bedroom house in my area would be 50% of my income and I make six figures. The dollar doesn’t go as far as it used to that’s for sure.

The real question is with $6k a month... What are you doing with that money you should be just fine?

Let me get my kleenex. My situation is much, much worse. They don't know nothing.

Terrible advice do not sell it. ur paying 600 a month for day care, that's the problem.

500,000 dollars and insurance and property taxes. Why didn't you use your common sense?

They still recommend 15 year fixed on a quarter of take home pay? Average household income in america after tax and before insurance is 5500 a month. So well call it 5k after insurance. On what planet will someone be on a 15 year fixed with a 1250 mortgage payment? Daves principles do not apply to people anymore. So out of touch with reality. Wages did not keep up with housing costs ocer the 30 years dave has been doinf this and it shows.

With a fixed rate mortgage, the longer you stay the easier it gets. Wages go up with inflation, but the monthly payment stays the same. Wait it out.

I don't think they should sell the house. If they sold that truck and really tightened up the budget I think they could make it work sometimes downsizing is more of a nightmare than a solution.

When rents are nearing 2k for a 1 bdrm here in NY, you best believe 40% of income is going towards rent.

$150 a week are you kidding me! My son Day Care is $2000 a month

But they have to live somewhere. What would it cost rent a 2 or 3 bedroom home? Plus rent will continue increasing every year and your income might not keep up. Your mortgage payment is fixed so income can catch to the 25-30% target.

Your income should be able to raise 15% over a few years. Just hang in there. No vacations. Take care of your cars.

She works from home and put her kid in daycare.... 🤯

Just saying. But I’ve got two boys two dogs. Stopped my hobbies. Work a full time job and work a 24 /hr part time job on the weekend. Anyone can do it. Just if you want to

WOW !!!!! A $4000 house payment is crazy !!!! LOL !!!!! I would rather rent at $2000 and invest the other $2000.

Where do they live if they sell. 6K a month should be enough with no other debt. They need a 60k emergency fund with that mortgage over 30 years. That is a long time to be paying 4k a month.

honestly, millionaires should buy these type of homes imagine of job loss or death how would the one person pay?

Their incomes will increase. As long as they have a fixed mortgage, they should just wait and stay where they are. Our mortgage was a bit of a stretch when we bought it, but over a decade later it’s a very comfortable payment.

Sale the the 500k house downsizing to a small home,,

She won't pay capital gains if she buys the next house with the profit

Am I crazy, or does living expenses (mortgage, insurance, property taxes, utilities) equaling half of your take home sound like a good situation? I’d love that, mind you I live in Southern California

I bought half the house I qualified for. No regrets at all.

If she is going to ask him to sale his truck, she needs to ask herself, what am I willing to sale? May not be dollar for dollar, but it should be something that gives her an “ouchie” moment too

Well when they all cost over half a million the whole “gotta live somewhere” aspect comes to mind…