Real Estate the Ramsey Way - My Roommates Left Me With The Mortgage

Episode Date: August 17, 2026

An affordable home suddenly became unaffordable after roommates moved out. Dave and Jade help navigate the next steps and explain how to make the best financial decision without acting out of panic. Next steps: ·   🏠 Not sure what to do next when buying or selling your home? Check out our ⁠⁠Real Estate Home Base⁠⁠ for free tools and resources to guide your next steps. ·   🏠 And if you’re ready to buy or sell your home, ⁠⁠connect with a RamseyTrusted® real estate agent⁠⁠. They’re experts who’ll help you confidently navigate homeownership the way we teach. Explore more from Ramsey Network: 💸 The Ramsey Show Highlights 🧠 The Dr. John Delony Show 🍸 Smart Money Happy Hour 💰 George Kamel 📈 EntreLeadership   Ramsey Solutions Privacy Policy 

I bought my house around two years ago with a friend and a few family members. And the plan, yeah. Strike one, strike two, strike three. When you say that, can you clarify, when you say you bought it with them, is everybody's name on the mortgage? No, unfortunately, it's just me. So you're the only one on the mortgage? No, that's actually good. That's probably the best case scenario, actually.

Okay, so you bought the house with your brother and two friends? My sister, her fiancé and a friend, yeah. Sister, fiancé, and friend. Okay. And basically, I'm in a situation right now where almost all of them have completely moved out. And now my mortgage is looking like it's going to go up, like around $200, $200 by June. Okay. So.

Why? Do you have an adjustable rate mortgage? It's not an adjustable rate mortgage. I think it has to do with my property taxes. Yeah. Okay. So it's going up by $200. Unfortunately, the value of my house has gone down.

So I think if I sell it, I'd talk to my real estate agent and I got it down to a reasonable price. Why did the value go down? Or did you overpay? The value actually when it was evaluated when I bought the house was actually I think like 15 more than what I paid for it. I think there's just not a lot of good comps in the area. So there's not like the value ends up being a little bit less than it was. Tell us real numbers. us what you bought it for and what you think it's worth?

So I bought it for $460. It evaluated at $4.75. Okay. And I just got an appraisal of like a few months ago because I was finding I'm doing a refinance. And it evaluated at $450. Yikes, I'm sorry. Yeah, quite a bit of a difference. So I'm in kind of a situation right now where like I did the math and it's looking like

after, you know, commissions for the sellers and buyers agent, I'm going to be losing money on it. But is it worth it to just do that, take on like a little debt and just pay that off or hold out, even though realistically it's going to be really tight being just me? How much is a little money? Because one time, I took $4,000 to closing with me to get out of a house. and that was the beginning of me and my wife starting baby step two, and it ended up changing our entire life. If you're talking about you're going to be $50,000, now that's a different story. I think what's fees you're going to be getting close to 30?

Yeah, it's looking like at worst it's going to be around 30. And at best, if it doesn't, you know, if I don't sell it at a reasonable price, it's going to be around 50. So not great. But at least like if I were to get like a personal loan and come up with a little bit of money myself, like maybe cover a little bit of a difference. You know, I can't see myself taking more than like a year if I work really hard to pay that off. Well, because I'm also thinking you've got time. Like when the house goes on the market, like you've got a couple of months there to save up some cash.

Like how realistically in three months, how much cash could you save up? I mean, I know it's hard because you don't have roommates anymore and you're trying to pay this big old mortgage. but is there anything you could do to start stacking some money towards this? I don't know, to be honest, with no help, it's going to be really tight. It's the problem. The reason why I want to sell in the first place is because I feel like it's going to be so tight. I'm not going to be able to put money away. Can you like...

And I'm going to be a situation, you know, where if something happens, I just end up losing the house anyway. Can you rent out the rooms? Can you do like temporary rent out the rooms to other folks while you get this money together to sell the house? I've looked for I've been looking for rentals when people first started leaving and I haven't really had any luck with that. I've tried furnished finders. I've tried reaching out on like Facebook marketplace joining groups and I've even lowered the price three times at this point and I maybe it's just because they don't want to have like a roommate or I'm not exactly sure but I just haven't had any luck finding someone. Yeah. I mean this is a cautionary tale we tell folks all the time you know do not buy a house with the intent. that somebody else is going to help you prop up the mortgage payment because this sort of thing happens all the time. The only way out of this is through it, you're either going to have to take a personal loan for the difference and eat that cost, or you're going to have to find a way to buy yourself time with roommates or stacking up the cash yourself. My question is whether or not saving 20% for the down payment on the house is actually mission critical,

or if that's something that's – and I'll kind of give you the background of we recently, discovered the baby steps. We had enough cash to just pay off all the debts right away. Wow. We decided to go get debt free. Good for you. That was hard. And yeah, well, it was a lot, but we've been blessed and we both have good job as my wife,

or I guess, fiancé technically, but soon-to-be wife is about to start a new job and start making about 60 grand more than we had previously. Wow. So we have a lot of income that is coming in. we just now having recently paid off the debts don't have as much cash saved up as we used to and we are debating whether or not it makes sense we've never owned a home so whether to do an FHA loan because we have enough cash to cover the payments. I know you guys teach to like the 15 year but if we're going to do stuff like that to afford it, we'd need to spend a lot more time saving up. I just trying to weigh on the benefit. Fair.

Okay. That would work too. That's a good point. Anyway, way to go. Congratulations. Thank you. The thing on the 20% down, we don't slap our fist on the table on that. We just remind people that if you put 20% down on a conventional loan, you avoid PMI, private mortgage insurance, which is about $75 per month per $100,000 borrowed. So it's a lot. Yeah.

And it's basically foreclosure insurance. meaning that you're buying insurance, the private mortgage insurance, PMI, is you're buying insurance for the mortgage company that pays them in the event they have to foreclose on you and lose money on the house. Because you don't have a big down payment. They're worried that they're going to be upside down on the house at a foreclosure. And that's where that comes from. But no, we don't do that.

We just say it's going to be more expensive if you don't. Most first-time homebuyers on the Ramsey plan don't put down 20%. Okay. Most of them put down 5% or 10% or something like that, and they do do a conventional loan on a 15-year fixed where the payment is no more than a fourth of their take-home pay. The FHA loan, you can get in for a little less out of pocket. That's the biggest difference in it,

but it is more expensive. The closing costs are higher, the gotcha fees at closing are higher, and the interest rates are a tick higher, just a little bit. Gotcha. So it's not a horrible deal, but it basically was designed for people to buy their first home or to buy a home if they don't have much money. And you pay a premium to get into that to save a little bit on the down payment stroke. But if you'll be patient and now that you don't have any debt payments, build up a good strong down payment, not 20%, but, you know, five or so and get you a good fixed rate, 15-year conventional.

That's going to be what we'll recommend. That's the best deal for you guys. Right. And the 15 year, by the way, is cheaper. The interest rate's always lower on it than it is on the 30. And you'll save way more on interest over a 30. Yeah, that was kind of the – because I know you guys talk about the 15, and I've been following the math as I do research here.

I was wondering if having the 15 but having the more expensive monthly or if you set up additional payments beyond this – if the 30-year has payment once a month, if you pay a little bit more than that. Yeah, but as of this moment, as we're sitting here talking, the 30 year is three quarters of a percent more than the 15. It's sitting at about four and a half, I'm sorry, about six and a half, and the others at about five and three quarter, a 15 year is. Okay.

So it's considerably cheaper. It's almost one percent. I mean, so if you borrow like $300,000, that's $3,000 a year more. You're paying so that you can, wiggle around in your plan you just laid out. Right. And that's all you're doing. You're just trying to wiggle your way into it.

Just be calm, be a little bit more precise, slow down, and build the cash up, build the cash up. And then it's your first house. You're not going to buy the freaking Taj Mahal. You don't need a McMansion. Yeah, I think that's the other thing. Move out of the city and out to the country. Dun, dun, dun, dun, dun, done, done.

And, you know, get something that needs a little bit of work. and get something that not everybody's like thrilled that you bought it. If some of your friends make fun of you, you probably bought the right house for your first one. But you know what? The stupid thing around Orlando, Florida will go up in value. I mean, just put Mickey ears in the front yard. It'll go up in value. You know, I mean, it's going to go up.

And you're going to make good money on it in a few years. And your guys are going to be making more money and you'll be able to move up. You know, it's your first house. And Taylor, do not buy this house until you are married. Yeah. Period. No exceptions. Do not buy a house with someone you're not married to.

I don't care if we call them a fiancé or not. You're not married. The law doesn't go, oh, wait, they're a fiancé. The law says, you're not married. It's your roommate. And that's a general partnership that has a whole different set of laws on it. Do not buy a housepeople with someone you're not married to. If you listen to the show long enough, you'll hear that call.

And we, if they're in a house, a nightmare situation. And they thought, well, I thought I'd be okay. And life didn't work out as they planned. Yeah. And now you don't have the protections that you would have if you were married. So here's what's interesting to also, Taylor, that's difference in a 15 and a 30. I guess I've been doing this. It's coming up on 40 years now. And I've had the question from day one. Because if you add up the total 30 payments on a 30 year and 15, I mean, 360 payments on a 15 year and 180 payments on a 15, 180 payments on a 15 year for your 15 year mortgage and you add up, including interest in principle, and you add up 360 payments for the 30 of the 30 year mortgage,

and you look at them, it's hundreds of thousands of dollars more you pay for the same house. Hundreds of thousands in every case. So I've been using that example to go, never do a 30. For 40 years I've been talking about this, and people go, well, I'm going to take out a 30 and promise to pay it like a 15. Here's an interesting stat for you. I'm promising to do stuff that you're not going to do. The FDIC has studied that, and they say that 97.3%, that's all of them, of the

the 30-year loans, are not systematically prepaid. They're often prepaid, but they're not systematically prepaid, meaning I'm going to add the difference every month and I'm going to be very precise and very disciplined because I'm the one human on the planet. No, you're not. That's just absolute bull crap. You're not. I'm very disciplined in my life. There's a lot of things I'm very precise on. I don't miss on. And I'm not going to set myself up and make that promise to myself. And I teach this crap for a living. Instead, trick yourself into doing smart things like signing up for a 15 instead of a 30. Hey guys, thanks for listening to Real Estate the Ramsey Way.

Now, if you're here, you're probably thinking about buying or selling a house. It's exciting and one of the biggest financial decisions you'll ever make. But you don't want to do it with an inexperienced agent who will rush you into costly mistakes, like the ones some of our callers find themselves in. You need a pro who knows what the flip they're doing and will keep you on track with your financial goals. That's why we only recommend Ramsey trusted real estate agents. These are vetted, hand-picked pros who actually listen to your needs, guide you through the process, and fight to get you the best deal. To find a Ramsey trusted agent near you, go to Ramsey Solutions.com slash trusted agent.

That's ramsysolutions.com slash trusted agent.