Play with a stacked 'deck' when buying a home: Jade Warshaw

All right, let's bring in personal finance expert and the Ramsey Show Co host Jade Warshaw. Good to see you, Jade. All right, so you were able to, I want to talk about housing because you were able to dig yourself out of hundreds of thousands of dollars in debt and buy a home. Love that story. Can Americans do that today? Listen, I get it, Home prices, they're up 47% since 2020, right? We're dealing with the inflation. Even for a 30 year mortgage, you're paying over 7%, right? And then you have to deal with the fact that there's a low supply. So even if you do buy a home, maybe it's not the home that you were hoping for. So I do get it. However, we can't let all of these external factors, however negative they may seem right now, we can't let them stop us from, you know, really digging into a long timeline that we set for ourselves to ultimately save up and get ourselves financially ready to purchase the home of our dreams. But you kind of hit on it, Jade. It's not being in a rush. I think that if you get all of your, you save up the down payment, but also you can bide your time and not get into a bidding war and pay too much for a house that might be quite a bit cheaper a year from now. That's right, Dagan, we have to kind of pull back and think about what's the reason that you buy a home in the 1st place? It's not to impress your friends, right? The reason that you buy a home is so that you can stabilize the most expensive line item in your budget, right? You want to create stability and that's your that's your mortgage. And then the second reason is to build well through equity. OK. So if we really kind of lose focus of that and we start to take on things that don't make sense, right? Because it's very easy to get desperate in this market. And when you get desperate, you start looking at things like adjustable rate mortgages. We've seen a 15% increase in that, people with zero down mortgages. And then even considering 40 year mortgages, again, you're forgetting the whole purpose of buying. So go ahead and embrace the journey. My husband and I rented for 10 years before we were able to save up, you know, pay off our debt and get in a position to buy. And I'm here to tell all the American people that's OK. Yeah. And Jade, you know, as a symptom of probably that issue that you just outlined, we are seeing reports that the numbers of folks predominantly in the South and the Midwest who are underwater on their mortgages now it's climbing. And that's so troubling. What what this means is that they bought at the peak of a market, right? And now they, their homes are losing value and they owe more on their mortgage than what their home is worth. What is the lesson here? And tell us, you know, what is your piece of advice to folks that are looking in the market at this moment while mortgages are still high and prices are high, too? Yeah. The lesson here is not to let the external factors determine when you can buy a house. You determine that. And So what I tell people, of course, yes, we want to have your debt paid off. It's great to have three to six months of expenses saved. But you got to play your cards right when it comes to buying a home. And I say going with a stacked deck. It's an acronym. The D is for that down payment. Try to get somewhere between 5:00 to 20%. I'm fine with 5% in this market. Obviously, E think about earnest money. You're going to have to put that money down just to say that, hey, I'm serious about this. Somewhere between 1:00 to 3%. Then C we're talking about closing costs. Usually people roll that into the mortgage, but if you can pay that upfront, that's great. You're saving yourself a lot of interest as that loan Amber desires is overtime. So and then of course, K, we need to keep in mind other prices like appraisals, inspections, and just honestly, the cost of moving is expensive. So if you can play with a stacked deck, you're going in and that house is going to be a blessing, not a burden. Play with a stacked deck, save a little money. Maybe you can build a deck at some point. Decks all around Jade. Great stuff, good to see you. Thanks for being with us. You too. Thanks.