A TEXAS couple shared their disagreement over whether to take out a mortgage to buy a bigger home
The pair paid off their $300,000 home but were now looking for more space.
Andrea from Dallas, Texas called The Ramsey Show to get the financial expert’s opinion on a disagreement she was having with her husband.
She wanted to move to a bigger house to make room for her expanding family, but her other half refused to take out a mortgage to buy a new home.
“We are having our second baby due in November,” she said. “He is having to work from home, I am nesting and we feel it is time to move house.”
Andrea found what she believed was the perfect home for them, but her husband thought it was too expensive.
The pair were currently mortgage free, but would have to take out a new mortgage if they wanted to buy the house.
“He just doesn’t want to do it,” Andrea said.
Their current home was worth about $300,000, but their other home was worth $495,000.
Meanwhile, they saved about $100,000.
“You only represent $100,000 in disagreement,” Dave pointed out.
He suggested they could save $100,000 in three years, even if it meant living on “rice and beans.”
Different Types of Mortgages
A conventional loan typically requires a 20% down payment and a credit score of at least 620.
A fixed rate mortgage offers a loan term typically of 15 or 30 years, during which the interest rate does not change.
On the other hand, a adjustable rate mortgage (ARM) has a variable interest rate.
A popular type of adjustable rate mortgage is the 5/1 ARMwhich offers a fixed interest rate for the first five years and an adjusted annual interest rate thereafter.
O FHA loan is a government-backed loan for first-time buyers that only requires a 3.5% down payment.
It can be a great option for less qualified buyers, but it requires the borrower to get private mortgage insurance.
Military service members, veterans and eligible spouses may qualify for a Veterans Affairs (VA) Loan.
The VA loan does not require a down payment in most cases.
“Once you quantify it like that, you have some really valid points for discussion,” said Dave.
“I don’t think any of you are in the stupid zone with this.
“If you took out a small mortgage and paid it off pretty quickly, that doesn’t violate our guidelines.
“But I have to personally agree with your husband,” she added.
“Once I got out of debt, you would not drag me back kicking and screaming under any circumstances.”
NATION UNDER MORTGAGES
The average mortgage debt balance per household was $241,815 in 2023, according to Bank rate.
However, in 26 of the most expensive cities in the US, the average mortgage balance exceeds $1,000,000.
And 18 of those cities are in California.
See what a financial advisor recommends if you feel stuck with a low-interest mortgage.
And check out the 10 most affordable cities in the US to buy a home.
This story originally appeared on The-sun.com read the full story
/cdn.vox-cdn.com/uploads/chorus_asset/file/25514205/2152338347.jpg?w=300&resize=300,300&ssl=1)
