Don’t Fall For This Sneaky Mortgage Trap!

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[@Greggsberdard]

No financial institution should be allowed to own 40% or more of the single family homes. This recession is paving a way for a monopoly on homes to further rid of the middle class. It would be wise for most Americans to not sell their homes if they're able to.I want to buy houses cheap in 2024 and maybe invest in stocks. When's the best time to buy stocks? Some say they make a lot, others warn the market is risky. Advice?

[@BateserJoanne]

From my own experience, getting expert advice is crucial to avoiding mistakes and losses in the stock market. The crisis could get worse as low wages, high costs, and rising rents make it hard to save. Many middle-class Americans risk an uncertain retirement without owning a home.

[@VictorBiggerstaff]

That's true. I've been assisted by a financial advisor for almost a year now. I started with less than $200K, and I'm just $19,000 short of half a million in profit.

[@lolitashaniel2342]

That's quite impressive! Can you share more information about your financial advisor?

[@VictorBiggerstaff]

Rebecca Nassar Dunne is the coach that guides, you probably might've come across her before I found her through a Newsweek report, she's quite known in her field, look-her up.

[@crystalcassandra5597]

Thanks for sharing. I searched for her full name, found her website immediately, reviewed her credentials, and did my due diligence before reaching out to her.

[@DM-ed9os]

I know a loan officer who flat-out refuses to do an ARM loan on properties that are owner occupied. She pushes back against her investor clients when they want an ARM loan as well, but sometimes she loses the battle. She is extremely careful to protect her borrowers from the ARMs because she knows they can get slapped with a payment they might not be able to afford. I have always admired her for doing this.

[@francoisnguyen6623]

Loan officer with that kind of moral integrity is rare.

[@fhuber7507]

1980s the adjustable rate mortgage was extremely popular... so were foreclosures.

[@kathleencooney1518]

I paid 10% in 1979. Fixed rate. Interest went up a lot higher but it was expensive to own that first home !!

[@azteca6695]

I'm so grateful that we paid off our mortgage.😊

[@jray9661]

Congratulations to you! I’m 22 and haven’t bought a home yet but that sounds like the perfect place to be🔥

[@boredoreos]

I'm so grateful that we didn't pay off our mortgage and instead dumped it all in the S&P 500 15 years ago.

[@StereoRodeo]

So did we I couldn’t stand all the interest we were paying so paid it off at age 47. Now plowing money in retirement since we are debt free.

[@seadragon1456]

Same!! It feels amazing. We buckled down 5 years ago. Paid it off this year in April. For those thinking this is only an older person accomplishment. Im a few months shy from 30!!! Our loan was paid off 21 years early considering a 30 year loan. We learned to say no and OWN our dollar. Now we’re starting to invest. Coulda shoulda started earlier but HEY it’s never to late to start and we didn’t know much about finances beforehand. Y’all can do it but stop upgrading. Stop telling yourself that you’re worth your materials value. By less. Eat at home. And for gosh sake get out from under the car payments.

[@peartfaldo]

heard that. mine was 5.5 years early.....

[@francoisnguyen6623]

We fell for this mortgage trap. In Ontario (probably all of Canada) we call it variable rate mortgage. Same thing as an A.R.M. We had the option of getting a fix rate at a low rate of 2.25% But we follow the advice of the broker to getting a variable rate at 1.4% because it’s lower. Even though we knew the rate was gonna increase that year we went against our gut instinct and listen to the mortgage broker trusting he’s the mortgage expert. That’s is my biggest financial regret. Our rate is now at 6.22% We shot ourself in the foot. There’s barely any margin left in our monthly budget after mortgage payment. And to top it off we got a baby on the way. 😩

[@noname-tf7kq]

Same story here in Quebec. When the rate went up once or twice , I followed up with him - "You'd be going from 1.8 to 2.4, that would be crazy" ....

[@Amy-jz9bx]

Husband and I in the exact same situation, same numbers, Here in BC. We also took out a 800,000 dollar mortgage! Stupid stupid. Our house did appreciated 400,000 in the past 3 years. But, so did everything else, so where do we move? Luckily, we found dave ramsey, have no other debt, and are practicing the rice and bean lifestyle.

[@moonj605]

u can’t refinance?

[@francoisnguyen6623]

@@moonj605; to refinance to a fix rate there’s some penalties. Mortgages in Canada are term mortgages. Your fix rate is lock for the duration of the term (3-5 yrs) not the life of the mortgage. At the end of the term only then you can refinance without penalties. At least that’s how I understand it. There maybe some exemptions

[@Talmorne]

My mortgage broker suggested I go for a variable rate because the market was really good at the time and no one was expecting the interest rates to go up like they did. Because of the sudden rate rises my rate went from 4.2% to 6.7% in 13 months and has only just leveled out

[@freedomring3022]

never ever ever get an adjustable rate mortgage, and NEVER get any mortgage that has a balloon payment

[@aolvaar8792]

When the house across the street is going to sell for $50K, buy it and then work out a mortgage.

[@mcleananderson4948]

This is bad advice, 5 year ARMs are locked in for 5 years. They can also only increase by a set amount after that 5 years. You might not even live in the place in 5 years, you can also refinance.

[@freedomring3022]

@@mcleananderson4948 I’ve been investing in real estate for 30 years. This is perfect advice for any home owner. You have no idea what you’re talking about.

[@tstanley01]

LOL..the USA is the only place with fixed rate mortgages...Basically every other country in the world does 5-7 year resets on their residential paper. 99% of commecial buildings, including the store you buy your groceries at is operating on adjustable rate loans, and are typically interest only. There is nothing wrong with an ARM if you are properly prepared for the adjustment. By the way, unlike before, you have to qualify for the higher rate up front. So if you cannot afford the mortgage at the higher future rate, you will not qualify. In the next 5 years, the odds of the rates going down are near 99%. If you plan properly, you could save 10s of thousands over the next half decade choosing an ARM over a fix rate mortgage. What you don't want to do is get an Arm today because that is the only way you can afford the house you want and to maintain the lavish lifestyle at the same time. The problem with Dave's thinking is that he never allows for opportunity cost. He only weighs risk in his calculation...

[@JasonGroom]

This is simply not true. ARM and balloons both have their place. They are not for the long term home owner. They are for the person who knows they will be needing to sell that house 4 years from now on a 5 year ARM. If you put those two together on something like that, you can save a lot of money and never be impacted by it

[@elbenji]

we are looking to buy a house within the next month and this is EXACTLY what i needed to hear! Thank you Dave!

[@BusArch42]

We bought our first home in 1997. Fixed rate 15 year loan. It was 6.75%. The same time we had friends who bought a house also. They got a 30 year ARM for 4.5%. The first year it went up to 6.5%. The second year it went up to 8%. They almost lost their home. Rates were dropping but theirs was still going up. Finally they found jobs with relocation included and got out. We left in 1999 ( long story ) but we were given 6k after selling. They had to do a short sale in 2000.

[@jordanjenkins1671]

That doesn't make sense. The rate is supposed to adjust to the market. Their rates wouldn't be going up if the market rates are going down.

[@BusArch42]

@@jordanjenkins1671 it doesn’t but their terms allowed it to go up and did not link it to the federal rate.

[@Gamma_Labs]

I did a 10 year ARM on a 30 year mortgage. Set up my payments to clear it off before the adjustment. Rate difference was 2.8 for ARM and 3.7 for fixed.

[@Cloudyconfusion]

These 2 or Dave + his daughter, are my favorite Duo on this show. They’re the only ones that seem to have empathy while also being direct and easy to understand and most importantly NOT condescending. This guy next to Dave (don’t know his name) is so easy to listen to because he doesn’t like hearing the sound of his own voice more than Dave or the flowing conversation). He’s the best cohost to Dave! Love to see more of you guys!

[@linuxsurfer2002]

This is George Kamel

[@seagirl1100]

Dave and daughter are best to me! They has both sides views, perfect combo!

[@sandraazucena6589]

Thank you Dave Ramsey!!!! You have done so much for me!

[@edennis8578]

Back in the 70s, my husband got a mortgage with a greater than 8% fixed interest. He had no credit score because he had never had a loan or a credit card. However, the loan was only $10,000 and our monthly payment was about $100.

[@MrJERZEYBOI23]

Bro 10k versus 500k at 8% be real 😂 today is off the charts

[@TommyGunzzz]

That's actually a point against Dave and all these people telling you to buy, other KZbinrs have brought it up. Houses used to be unbelievably cheap when rates were high. They had to be high for the bank to make any money at all

[@billdursa4976]

Mortgag rates are not actually high today. My parents mortgage rat was 81/4% in 1957. My firast rate was 8 3/4% in 1977. my second rate was 12 5/8 in 1984. Some people were paying 16% in 1983. Rates only seem high now because of historically low rates in the previous 4 years.

[@andreacomiskey2249]

THANK YOU!!! I was a mortgage underwriter from 1992-2012. Whoever thinks rates are high haven’t seen anything.

[@jasonleatherwood2172]

Morons you could also buy a 2000 sq ft rancher for 50000$ in 1985 same house today is 400k and what double wages come on man 20$ per hour is considered a good job when 400k house is a fixer upper lol

[@rr-brown6445]

😂 No, because houses were $50,000 then. 15% on a 50k house = $7,500 on a $500,000= $75,000.

[@romeoj30]

Please don’t ever mention rates prior to 2000 without also mentioning the lower cost of house prices! Would you rather pay 16% interest on an $85k loan or 7% on a $550k loan? I can do basic math and I’ll take 16% rates all day if the home is cheaper. Also wages have not kept up and the cost of all goods is easily 200%+ more today.

[@mukd559]

All these old timers talking about the rates in the 70s and 80s… garbage beater homes weren’t selling for 500k then

[@fcbarniessoccer8952]

Been renting for 3 years. My rent has only increase on by $50 in 3 years. Granted not in a city. But no one should buy a house in this market. It’s absurd.

[@steve-0g466]

Ur absurd for not buying a home 3 years ago. U missed the boat and us that bought are sitting pretty with loads of equity

[@CokefishR]

@@steve-0g466Homes are investments for the rich. You don’t sound like one.

[@hax0rz100]

It's funny how Dave talks about how ARMs are a terrible idea since payments go up every year but he talks about how renting is OK because renting is buying patience. Do you know what rent payments do? Go up every year 😂

[@hellokitty8552]

Rent goes up 5% at most if you have a lease. it doesn’t even go up every year bc landlords will keep rent the same for good tenants as long as they’ve been paying on time. 2000 average rent and 5% of that is $100. Now go do the math for ARMS. It is NOT 100$. You’re welcome.

[@PaolaHuezo]

⁠@@hellokitty8552landlords won’t keep it the same WHEN HOI and taxes increase just because tenants are always making payments on time.. Landlords still have to make a profit so as anything increases, they will increase for cash flow. People can always refinance into a new ARM or FRM. At least you’re still building equity than throwing your money away. Every situation isn’t black and white on both ends regardless. I’ve heard of rent going up $500 on a $1300 rental property because of the tax assessment. At least you know what to expect on an ARM, it’s on your closing disclosure before you close and you’re only approved on ARM rates when you can afford the highest rate payment anyway to avoid defaulting.

[@bentovar6456]

​​@@hellokitty8552I'm a landlord and I raise rent every year on my tenants even if they pay on time. The landlords that don't, end up regretting not raising rent when the tenant moves out. Even Dave Ramsey raises rents every year.

[@jebthompson1400]

Also, you are usually locked into a rental for no more than one year, if it goes up too much you have the option to move, a mortgage is a 10-30 year commitment unless you can sell the house for enough to cover the mortgage.

[@mormril]

Do you know what housing does? Goes up yearly as well with your property taxes.

[@himaalsawlani5456]

In my country fixed rate mortgages remain a dream. Our literal only option is fixed for a few years then floating rates similar to ARM. Though you can get around it by refinancing the loan at a good rate right before the fixed exchange rate period is over on the original loan.

[@nodrogytsirk]

I have a small mortgage, just retired with a sweet pension….and thinking of moving closer to family. Forcing myself to wait because prices are going down. Will sell higher here and buy lower there. And in my country I can port my existing mortgage to my new home. My mortgage is locked in for 4 more years. Lucky that my current home is in a growing desirable market, huge housing boom here, and I know my place is desireable.

[@the_death_childyt4420]

Thank you for all the information you provide. I have been learning so much thank you 🙏

[@nathananthony7517]

This might be the most informative segment from the Ramsey Show that I have ever seen.

[@levigoldson]

The country I live literally only has adjustable rate mortgages.

[@jutde]

If you're lucky enough to time the market perfectly, an ARM can be great. The problem is that it's a MAJOR IF akin to a lottery win!

[@BadBrad119]

This why why most countries like Canada do not have true fixed-rate mortgages. We have ones that renew every 5 years, effectively making it a variable rate. Only helps the bank, and will cause a crash

[@hornetguy9063]

And interest rates in Canada have skyrocketed in the last year plus, just like the USA. So basically, a lot of people in Canada are about to see their mortgage payment skyrocket?

[@macneoh7418]

Why do people still live in Canada?

[@paulstandaert5709]

So, there's no fixed rate mortgages in Canada? Are they all done mandating Trump's warp speed vaccine?

[@creolelady182]

people don't understand money, interests' rates etc. I tried to explain these concepts to some people I know and they simply could not grasps these concepts . They get themselves in trouble with the convoluted schemes and the next thing yo know they are out on the street looking for someone to bail them out

[@TheLovely990]

Amen for this information. Banks are in it for banks, not consumers.

[@Flybynight9465]

I'm using an ARM for my current home but it's only because it's not my PERMANENT home. I will be moving out before the adjustable period begins. The next and last time I move into my "forever home", I will be using a fixed rate mortgage.

[@MattLundquistVW]

Looks like we are going to repeating the 2008 mortgage collapse.

[@clownboy84]

Mortgages rates and terms are a bit different in Australia and New Zealand, we don't have 15year fixed max I have seen is a about 5 years 3 is more common, and adjustable rate as you describe sounds slightly different to our variable interest rate. But I always like learning about it and applying it to the Australian setup.

[@artemkalinchuk]

ARMs are a great deal for those who buy and pay off the mortgage within the ARM limit. Especially investors.

[@OUTDOORS55]

Except that's literally less than 1% of the people how finance through an ARM

[@simplerway489]

Experian is the worst of the three credit bureau.

[@irenez7439]

I got a loan in 2004 5 year arm at 5% interest. By the time the 5 years were up, it started to go down the lowest it went down to was 2.8 or so, and now it's 5% again, but we will pay it off by the end of the year. But i still don't recommend a variable loan.

[@alexralston22]

Pay cash or half down or dont buy the house. These rayes are stupid high. Time for us all to start thinking again and watching every dollar we spend.

[@hornetguy9063]

I have two mortgages. 3.625% and 3.25% fixed rate. Glad that I knew better than buying an ARM

[@tubenachos]

Dave yelled at George for no reason 😂😂😂

[@DoctorSmartyPants]

Probly because George is in way over his head.

[@TheGomez1105]

😆 and then he raised his hand like hold up George, I’m not finished.

[@nikitakucherov5028]

Interest rates will go down in 2024

[@braydenwood4897]

Or just sell the property before the ARM is up… or potentially refi… you do have options if you are in an ARM.

[@tstanley01]

That works, as long as the values don't dip over the initial term. If they do, you may have to put more cash up when you refi. Unexperienced people buying arms probably don't have capital to put up another 550-80k when their 500k is now worth 400k...

[@GaganSingh-il2tl]

The same interest that Ramsey has with the mutual funds he promotes lol

[@TommyGunzzz]

😂

[@americaneconomist86]

Isn’t the whole banking system in the same dilemma? They are loaded up on low yielding government Debt and can’t compete with money market funds- t-bills that pay over 5.5% a year currently- ergo, money outflows of the banking system, contracting the available credit amount, which will lead to recession and bank failures. Disintermediation indeed.

[@ryancraig4811]

An ARM is fine if you know for certain that you will not be in the loan at the end of the fixed period (6 months, 3,5,7, 10 years). Non-starter right now since the initial teaser rates aren’t significantly lower than a fixed rate loan. An ARM is a more sophisticated product, but shouldn’t be dismissed out of hand. Dave not mentioning that ARMs and balloons are the dominant mortgage loans outside the US. Without a subsidized securitization market to transfer interest rate risk to willing investors, banks have to share the risk with borrowers somehow.

[@americanadreaming]

After reading the title, I thought you were talking about time share exit companies 😅

[@quixomega]

I understand the logic here, I've noticed there is a delusional subset that believes rates are going to drop precipitously any day now. (Watch Bloomberg for 10 minutes for an example). I think the likeliness of this happening is vanishingly small, but I've seen people talking about it. I'm not into gambling on my home, are you?

[@hornetguy9063]

The rate is still lower than it was for most of the Clinton years. These people have vested interest in encouraging bum rushing cash onto assets, too, because it improves their stock portfolio. Low interest rates are basically a wealth transfer from the lower class to the upper class

[@tranger4579]

How is this nonsense even legal. I never understood that.

[@christopherderasmo5041]

People doing this forget about the ability to refinance.

[@phantom193]

we are lucky to have fixed rate mortgages. alot of countries have ARM types and alot of people are losing their homes due to rising rates. Having all these long term fixed rates that are sub 3% are killing banks though. Itll be interesting to see how this goes. Bidenomics is such a wonderful experience for all of us

[@n8inc924]

It seems like Dave doesn’t really like George. Or maybe he’s just crotchety today.

[@kclefthanded427]

Its never a good idea to get in debt while buying a home. Time to get rid of your second car

[@tyanabarnes6060]

My grandma let me see her mortgage payoff balance to help her make a plan to pay it quicker and saw that she had a 12.5% interest rate and I was SHOOK!!! I couldn’t believe it. So now I understand she must’ve bought it in the 80s, poor girl but she’s almost got it paid off

[@jloop_2008]

I'm surprised George didn't go off on a segment about how he is a "millionaire" because he did a 15 year and doesn't use credit cards. Good thing Dave was there. 😅

[@derrickpurdy7011]

Is it that people don't understand or are they not intelligent enough to figure it out?

[@chiconcruz9608]

What about the adjustable rate that stays the same for 5 years and you can refinance before the 5 years?

[@KatieBellino]

You're gambling that you can refinance to an affordable interest rate. Plus, refinancing costs money. If you can't afford a fixed rate mortgage, wait until the market improves so that you can.

[@edwest8804]

Aren't adjustable rate mortgages a huge part of why so many people lost their homes leading up to and during the Recession?

[@rthilson]

Just refinance before it goes up Might as well enjoy a lower interest rate for the first 5 years

[@ugcheleuce]

This made no sense to me, until I realized that in the US, home owners are often offered a temporary discount on their rate in the first year or for a short period of time at the start of their loan, or until the next rate adjustment. E.g. the actual rate is 6% but it's only 4% in the first year or until the first rate adjustment. So when the indexed rate goes down to 5%, your rate goes up to 5%. I suspect the jump that Dave is talking about here is when the period of the discounted rate comes to an end. I can't see any other way to make Dave's statements make sense.

[@VenomKen]

It's the same "introductory pricing" the ISPs use.

[@TharsanJeyachandran]

lit ep

[@cathyspiegel6765]

I bought my 1st home at 21 for 87k sold for 197k, 2nd home 170k and sold for 320k, 3rd 300k and sold for 589k and buyers paid all closing costs expenses etc... It is possible and very lucrative as long as all steps and details are followed.

[@cathyspiegel6765]

I worked my ass off with 2 full time jobs and extras on the weekend. Saved up 25k and handed that over to my financial Adviser to put down and for investing. So I continued working my ass off and in less than three months I was able to lay my hands on my first property.

[@cathyspiegel6765]

Credits to *ROCH DUNGCA-SCHREIBER,* my fin. adv. who has always had my back all through the process of working and investing. You can glance her name up on the internet and verify her yourself. She has years of financial market experience...

[@cathyspiegel6765]

The only way I was able to scale through all of this without stress was by working with a financial adviser. My adviser *ROCH DUNGCA-SCHREIBER* has always had my back all through the process of property investment and investing in general. You can glance her name up on the internet and verify her yourself. She has years of financial market experience.

[@Metalmanparts]

We did an adjustable and it worked out great. It went up .25% for one year and then back to where we started.

[@christopherpaige406]

This is why Dave needs to not let these kids run the gig. They have no idea and he just called it out

[@billwilhelm8285]

Should I save up cash for my second home or pay off more principle in my current morg with a 3.0% morg with 30% left ?

[@jordandowland7256]

Depends on your financial situation. You do you boo

[@hornetguy9063]

Sounds like a good problem to have. You can get better with an HYSA than paying off the mortgage and you’re probably not reckless with spending. So I say save up cash, but up to you.

[@billwilhelm8285]

@@hornetguy9063 house is only debt , no student loans and cars paid off

[@mimandshaindy4906]

I’m glad I locked in 2.6% during COVID

[@philhensley5986]

You are fucking crazy if you go into debt for a huge home to keep up appearances like so many people do. The long term intrest cost a long with higher taxes, insurance and operation cost will suck up so much of your earnings for your whole time of being able to work, and then what!

[@dylankramer9249]

Comment

[@harveyhanson2661]

We got a 7/6 ARM because we never live in a house more than 7 years, so no point paying extra for the fixed rate when we are not going to live there 15 or 30 year to benefit from the fixed. So we saved the .75% discount

[@jennyf308]

People need to stop referencing 80's mortgage rates. It's a ridiculous economic comparison.

[@scroogemcduckismyspiritanimal]

It's important people are aware it happened so they know it CAN happen. Otherwise they think 3% interest is the historical norm

[@lukeharris2622]

✝️🙏

[@jimroscovius]

I have to laugh at people who think 5% interest rate is high. How would they have survived the'70s with a 14-17% interest rate on houses??

[@shaycarol]

Houses were a fraction of the cost in the 70s

[@bb-1359]

40k houses

[@jimroscovius]

@@malcolmring242 Doesn't matter. We also made a lot less. I made $1.65/hr. I think minimum wage was $2.10.

[@OUTDOORS55]

@@malcolmring242 not entirely true. Your doing a simple wage vs housing costs comparison. You have to compare a 2023 house to a 1970s house. You are buying A LOT more home today than in the 70s. That comparison is irrelevant when you start comparing what you're actually buying.

[@ShayWilliam341]

The average home price was not $400,000 in the 70s and property taxes wasn’t high either why people keep talking about interest rates in the past because buying home today is not the same like the 70s lol.

[@BubbaSnipe03]

Why won't y'all talk about dave only not likimg 30yr mortgage because he lost his ass on his little 3m 60 mortgage

[@amireallythatgrumpy6508]

And because 30 year mortgages are asinine.

[@Rashaadthegr8]

My aunt before she died told me two pieces of advice 1. Don't have a credit card even though she always paid hers off 2. Never get an adjustable rate mortgage because they don't adjust anything but up.

[@unfairsanic5089]

My mom told me that as well before she died.

[@cloudstrife7840]

@@unfairsanic5089 I also had a family member die after they spoke ill of Adjustable Rate Mortgages. I'm convinced that there is a Bloody Mary type situation where the big banks kill you if you talk bad about this specific product.

[@nhuquynh6938]

She's not wrong but in our circumstance, ARM loan works. We had a good rate for 10 year ARM loan. We're putting extra money towards principal annually. After 10 years, the principal amount would be significantly reduced and we can have a chance to refinance anytime during during 10 years period or refinance to 15 years loan after 10 year term.It's about staying discipline on what you're doing.

[@stevencole7331]

​@@nhuquynh6938The key with Dave's program is he is basically works with the undisciplined and lack of common sense . They don't have the ability to work the system where the system works them . Owning a house free and clear in retirement is like getting another retirement payment as long as your not making big property tax payments insurance , and maintenance costs. Your mortgage and price of the house is a pre payment to that .

[@zimmermanlandscape9287]

Omg. So hilarious. You can adjust any mortgage down by refinancing lmao.

[@e2ndcomingsoon655]

It’s ARM because it will almost remove your arm when you realize all you are losing

[@michelleadams5609]

It's also called a death pledge because that's what all mortgages are.

[@Lionheart347]

Cleared mortgage aged 39 now im putting 50% of my income away. Bones start to hurt after age 40 not getting debt EVER again From UK. P.s this show is so refreshing. If I want to ever move I'll pay cash to top up for the new home plus sellers love cash buyers.

[@ToOpen6seven]

Congratulations. I wish I was still 39, but at 57, I am still trying to pay off my home (hopefully) in 7 to 8 years.

[@Tunechi65]

Gonna be rich and sitting at home cause you can't move. Hopefully I enjoyed your younger years and not be cheap

[@Painfulwhale360]

I’m 30 and my bones already hurt 😂

[@volgariver6426]

I'm wondering why the hell American School system did not have courses on things exactly like this. Hmm I wonder

[@BubbaSnipe03]

The education system isn't for street Smarts

[@uberhaxonova]

American public school was founded to keep the lower class ignorant of real wealth building. Independent study, private school, libraries are the best ways to learn if your stuck as a commoner

[@alhajitimbo7544]

It is not good for the 1%

[@kevinm.8682]

Back in the '80's the ARMs were popular because they were always lower than the fixed rates. Banks were smart enough to allow people to "lock" the rate under certain conditions-but they would warn you that you couldn't "unlock" the rate if rates went down so people rode it out. Brilliant marketing for the bank. Horrible concept for the consumer.

[@aeroeng22]

ARMs work out in overheated real estate markets, as long as they stay that way. The idea being that you get the home at a lower rate, the home ramps up in value, you sell before the ARM escalation rate occurs. No one can guarantee that of course.

[@jovitarich7078]

Wow, no wonder I lost my home lol…..Now I understand how it works….cannot refinance until the time is up…an eye opener….I bought another home now but paid a lot more but this time my lender explained more about loans cuz this is a strict bank that does 30 year fixed loans.

[@kodyballard76]

ARMs arent like this anymore, you can refinance at any time

[@Rashaadthegr8]

Homeownership ls like having a kid A LUXURY, NOT a civil right. If you can't easily afford it don't do it. The end.

[@marcopolo3109]

Right, I am in my 30s and my two story house with 4 bedrooms and 2 bathrooms is already paid off. I don't have to worry about monthly mortgage payments, or renting an apartment because that's wasted money. Feels good having peace of mind and a roof over my head.

[@Rashaadthegr8]

@@marcopolo3109 Renting is nto wasted money. Most people don't have a good enough job or discipline enough to have a house. Congrats to you though. What do you do for a living?

[@marcopolo3109]

@@Rashaadthegr8 I work in retail in the area of logistics. Is a job that I enjoy to do.

[@Rashaadthegr8]

@@marcopolo3109 gotcha

[@pyromaniac185]

Got my first house in 2021 at 3.125% fixed interest rate.

[@JaypesOS2]

Nice! Got a VA loan in 2021 at 2.5% 30Fixed, talk about locking it in at the bottom

[@tranger4579]

When i first applied for a mortgage I was given 200,000 borrowing for a home. When i demanded a fixed they dropped it to 90,000😂

[@tarawalton6778]

😮

[@Imhere12345]

😮

[@johnwilburn]

Sounds like they wanted whatever equity you made before the rate broke you.

[@tranger4579]

@@johnwilburn that's what I have been told.

[@johnwilburn]

@@tranger4579I've been a real estate agent for 20 years... Principal Broker for most of that. What I see is that it's not the mortgage itself that breaks people; it's that the people who gravitate toward bad mortgages also gravitate toward bad financial decisions everywhere else... car payments, student loan, credit spending of all kinds. The $200,000 itself would likely have been fine, but that assumes a lifestyle extremely uncommon in anyone who would take a loan like that. Banks know these odds. The house always wins. Get out of that "house" and own your own house! LOL

[@RyanCoomer]

I sneak my corndogs into a buffet and then watch others eat my corndogs thinking they part of buffet

[@Dan16673]

Lol

[@davysmith8569]

wtf

[@davysmith8569]

wt-f

[@jaaxoon]

Thank you for your service.

[@JustinCase780]

Pleaae drop off some mustard with them next time.

[@christiesiebens3611]

We need to see Dave R. talk like this more often, where he is imitating a "seductive schemer".

[@Curious-Lass]

My dad always told me to NEVER get an ARM. DON’T FALL FOR IT!!

[@ThePrinceAJShow]

“Your ticket to foreclosure.”

[@Elizabeth_lowkeyluxuries]

Before i bought a house i would have rather rented forever than get an ARM. Saw too many clients get hosed by them.

[@edennis8578]

That's no joke. I had friends who had a balloon payment come due on their variable interest mortgage; luckily she had rich parents who paid it for them or they would have lost the house.

[@terryhenderson424]

Back in the day, it was importand to have an absolute cap on an ARM mortgage rate. Back in the day, many couldnt grt a traditional, fixed rate loan even with a 20% down and a few extra for points. For znyone on zn ARM, payingbdown asap is key.

[@jcrowley1985]

They get so expensive you might even need to refinance with a LEG

[@mrsh1918]

😂 good one

[@kasession]

🤣

[@ping1693]

I just bought a duplex with a 5 year arm because it was the lowest rate. I am going to live on the smaller side finish the basements adding a bathroom, living space, and a bedroom. In 5 years I will buy a house and rent both sides of duplex. Locking both properties into a 15 year fixed. Not sure if it is right but it feels right.

[@hellokitty8552]

2021 got a 2.75% rate mortgage when average rate was 3ish. ☺️

[@michelleadams5609]

Amortized though. Doesn't matter what the rate is, it's amortized.

[@BC5EMU]

I purchased my home with an ARM. It started to adjust after the first five years. Some years it went down (yes, it happens) and some years it went up. I had to use an ARM because my home was not considered a "conventional house." My interest rate was never above 4%. And as for Mr. Ramsey's closing statement about the reason you have an ARM is because you can't afford the house....I had it payed off in less than 9 years. Apparently what I did isn't possible.

[@yeh0802]

Completely agree! I enjoy his show most of the time, but he just pissed me off big time as an ARM owner myself

[@alisatjaden3906]

Me too. Mine wasn't a conventional house, only could get ARM. Worked out very well for me. It's paid off and was sold

[@Shortballa11]

I didn't know this, but I am very happy I didn't choose this when buying a house earlier this year. It just sounded weird so I trusted the gut and decided not to.

[@JasonGroom]

So that loan that Dave sold in 1982 at 12% would have adjusted down over 30 years. There are times that they do make sense. I had one when i bought my house, it went down or stayed the same for 5 years after the initial 5 fixed years. As soon as it went up the dust time i refinanced. They will rarely make sense for 30 years, or even 15, but if you know you will be moving in 5, they can save you money.

[@robloxvids2233]

There are young smart people who make good money getting ARMs right now. They were kids during '06-'08 and don't remember the mess. They think the rate is high now without realizing they could go to 17%. In the early '80s they were around 20%.

[@danielhonas334]

Whoever hurt Dave in the 80's needs to apologize.

[@theadvocate3006]

I think it was American Express😊

[@jimroscovius]

And Fifth Third Bank, or something like that.

[@samanthalake5011]

Who hurt you, Dave. 😂

[@JustinCase780]

@5:02 Papa's impression of a "I deserve it" over spending chic.

[@paulstandaert5709]

Twenty years ago, I was teased by these adjustable rate mortgages. I did not know how they worked, but they sure sounded like some kind of trickery was up someone's sleeve. Why would someone lend money for a lower rate with it subject to change after a few years?

[@jkay07]

George did a great job simplifying it; they are passing on the risk to the customer.

[@gauravtee]

In the country I live, there are no fixed rate mortgages. Only adjustables (ARMs)

[@cameronvandevelde4186]

"I can make this payment" at 5:03, I'm literally dying laughing at this! lololol

[@papasquat355]

I remember before the 2008 correction we had access to 45 year mortgages and 125% mortgages. Both were/are financial death (unless you are a criminal) and helped, along with ARMs, lead to the crisis. I won't be surprised to see both return given the median house prices today.

[@gMcizzLeTribes]

Actually, ARMs can save you $$ on interest if you don't plan on staying for more than 5/10 years. As a single guy, I bought a condo using an 5/5 ARM at 5% when fixed rates were at 7%, knowing that I won't be there forever. Was cheaper than renting.

[@HARASSMENTENDING]

Exactly, there are times when an ARM makes sense especially if you are financially savvy!

[@therichbuddha3277]

What a confusing opening statement. Glad Dave clarified.

[@nataliam9764]

I bought in NZ. I was actually paying less with the variable rate because the Economy was stable. I sold with profit.

[@aarongorman8237]

This clip is a great example of why this show will die once Dave leaves. None of these other hosts could speak to this topic like Dave. They would just say some dumbass canned answers.

[@Dee-w5y]

real estate values are declining YoY nationally. This decline will continue for years. Decade. God willing.

[@renomccoy7986]

Should be called an ARM and a LEG.

[@pauljensen4773]

The only reason we are not screwed like Canada, Australia, and the EU is because we have fixed rate mortgages.

[@amireallythatgrumpy6508]

You are in a MUCH worse position than the places you mentioned.

[@RJWaynerium]

@@amireallythatgrumpy6508 that's patently false lmao

[@amireallythatgrumpy6508]

@@RJWaynerium That's incorrect. The USA is one of the worst places to be. Definitely the worst place in the western world.

[@davidrosenthal5795]

@@RJWayneriumonly if you are wealthy and never get sick.

[@pauljensen4773]

@@davidrosenthal5795 why? Because you are better off dying while waiting for medical attention?