The Ramsey Show - App - I Lost My Job and We Can't Make Our House Payments! (Hour 3)

Episode Date: December 14, 2020

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🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of the choice. Chris Hogan, Ramsey Personality, is my co-host today. We're taking your calls about your life and your money.

Open phones at 888-825-5225. That's 888-825-5225. Now, next week, in preparation for for Christmas we will be doing our annual giving show. It is one of the more popular shows we do and we devote an entire day of shows to giving stories. Stories where you

call in and tell about the time that you were able to help someone, able to give, able to be outrageously generous, or some time that you received something. That means someone else was giving. It's still a giving story. We want to promote and encourage outlandish, outrageous generosity. And so if you have a great giving story or receiving story to help someone be inspired

about generosity, then you just email Kelly at DaveOnAir at RamseySolutions.com. DaveOnAir at RamseySolutions.com. Just put giving story in the subject line, tell a little bit about the story. Kelly will get back to you. We don't tell you what to say or anything like that, but we just line the calls up so that we can get you lined up on the air. And Chris, we've had some great giving stories over the years. We had two of them in-house this year.

One, each of our team members, 1,000 team members, we gave them $250 each. Yes. With the requirement that they find someone in their life. It could be a family member. It could be a friend. It could be even an acquaintance that was affected by the pandemic this year and was struggling and hurting. And in some way, just be outrageously generous with that $250. And we had some wonderful stories come back on that.

People were able to find all kinds of situations where $250 just completely changes. Rock the world. And I'm going to tell you, having heard a few of the stories, it's one of those that get goosebumps just because you've had single moms be impacted. You've had people with health issues that have been impacted that truly are going to have a different type of holiday season because of that. And I can't wait for us to see the whole compiled list. Just the ripple effect of that, Dave.

Because once you have that mindset and that heart, what happens is you begin to make a difference. And you can talk about it or be about it. And through Ramsey Solutions, we were able to be about being a blessing to people. Yeah. And the second thing we were able to do was we took some of our Christmas party budget this year, and we used it to buy old, bad debt. We bought $10 million worth of medical debt and old car repossession debt and credit card debt, 8,000 accounts. And like I said, there's roughly 970 of us, something like that, right about 1,000 of us.

And so we gave everybody eight people to contact and tell them that their debt was forgiven. And the stories that have come out of that were absolutely amazing. It's Jesus' birthday. God sent his son so that we're forgiven. We're Christians, and so we like celebrating that. And we do it loudly and boldly. And so we're going to forgive your debt. Ten million dollars worth.

And some of the stories back on that, the amount of tears were incredible. Listen, I don't know why this hasn't been picked up by a major news network. You all. Oh, yeah, you do. Well, I know it's ridiculous. But but to hear people, you got to hear this now. So this is old debt. It could have been hanging around for five years or more. Right, where people haven't been able to make progress on it.

And to get a phone call, not a collection call, but to get a phone call from somebody to tell you that that debt's been forgiven in Jesus' name. You can't imagine the responses we got. You can't imagine the relief that people felt to have this thing that's been around their neck or this thing that's been in the back of their mind or their spirit for it to be removed was amazing. Yeah. Absolutely amazing. Ten million dollars off the books. Gone, like erased. And we had dollar amounts anywhere from 500 up to 15 to 20,000. But it didn't matter. It was the you could hear the joy in the people's voices uh and i'll tell you that's a job i would take all day long yeah to make those kind of phone calls call people tell them their dad's forgiven yeah that'd be a great job all day but uh it's amazing it was amazing it's interesting too calling because i had like 10 people to call and uh everybody else had

eight but i got 10 because it's kind of like my company so um i really and i never got a personal i got i got three i think i got four voicemails and left the voicemail and then i got um a bunch of disconnected numbers too yeah and so the uh because obviously if you're in collections you don't pick up a strange phone number i don't pick up a strange phone number anyway yes if you're not my caller id i just figure you're stupid i don't need anybody calling me so boom you're gone uh you can get in touch with me some other way because i just don't take phone calls that much anyway but anyway i and i'm if you're in collections i suppose it's that way now you're not gonna pick the phone up because you know some duper trying to hassle you right so then they open up their voicemail and it's me on there

going one of them was thirty six thousand dollars wowgiven. That was pretty cool. But I have no idea. I didn't talk to the guy. But I just left him voicemail. But some of them are calling back into the Ramsey Concierge team, and they're hearing the stories too. So maybe some of mine got through. But you kind of got a feeling what it's like to be a collector. You know, you got a bunch of be-dee-dee-dee. This number has been disconnected, you know, right?

And that's what you do all day? Yeah. Dave, you know I used to do that back in the day. God, shoot myself. You did? Back in the day, I would give out money at the first of the month, and then I got to collect. That explains so much. What does that mean?

So to be on this side of it. You were a collector with that voice? I used to make phone calls. There are people still in counseling. And they even knock on doors. Oh, no. Back in the day. Yeah.

Yeah. Oh. I know better now. Yeah. i'm on the right side of the process i'm preventative of medicine yeah well you're yeah you're not yes you're not on the dark side but no come to the light yeah i did i really did but the cool thing was is not only did we call them and leave them that voicemail they're going to receive letters from us confirming it and you all it, it was just a blessing. And I just, I want to encourage you out there, especially this time of year, you have people that are struggling and they look like everything's okay. Uh, on the outside face is okay. And they say stuff like, how's everything going? Just fine. They'll even tell you I'm okay. Or everything's all right. I truly, you know,

those people, and I want you to make an impact in asking and praying for them but also giving in small and big ways uh and tell you what if some of you are are going anywhere where there are valets or servers or any anybody in the hospitality world they all are operating on about 20 of their normal income because it's just their lives have been screwed this year by the shutdown. And so, you know, you really, somebody delivering a pizza to your house, you really need to throw a big tip on them. Yeah.

Can I tell you a cool story? Take a tip, triple tip, quadruple tip everywhere you go during the holidays, especially. Real quick. There's an FPU class. One of our team members sent this to me. They were meeting and doing the social distance distance but they were still doing their class well they called and ordered pizza and this guy brings pizza to the door

they give him a copy of Dave's book Total Money Makeover and Retire Inspired but there's an envelope inside of it they had collected a tip for this guy and gave him $400 okay the delivery guy and he's sitting there holding the book in the cash and he goes are you serious

and they were like, absolutely. This is what this class is about. We want you to read these books, but be blessed. Yeah. And that was really cool. They got it on video. It's awesome. We're going to do giving stories like that next week.

Send us yours. Send us yours at DaveOnAir at RamseySolutions.com, and we'll get you lined up to be one of the callers next week on the giving show you've worked hard to make your business successful blood sweat tears and prayers because as a business owner you are the secret sauce and your company is only as strong as you are. So what happens if a key ingredient is missing? And what if that ingredient is your health, resulting in expensive medical bills? Christian Healthcare Ministries, or CHM,

presents health cost sharing. It's different from insurance in that Christians help other Christians to meet their medical expenses. Various programs are available depending on your needs and budget. As a Better Business Bureau accredited charity, CHM has helped its members successfully share

over $5 billion in each other's medical bills for nearly 40 years. Various programs are available depending on your needs and budget. Learn how CHM has served small business owners just like you by visiting chministries.org slash budget. Learn how CHM has served small business owners just like you by visiting chministries.org slash budget. chministries.org slash budget. That's chministries.org slash budget. We were talking about the $10 million in debt we paid off. Anytime someone becomes debt-free, everything but the house or everything including the house,

something happens inside of you. Sometimes it's a real dramatic, you can just hear it click, you know? Yeah. And sometimes it's a little more subtle, and it's just kind of smooth. But either way, it's the sound of chains dropping, because the borrower is slave to the lender. When I hear a debt-free scream, I always ask who the cheerleaders were, because getting to be a freed former slave requires some cheerleading and a lot of motivation and a lot of scratching and clawing and a lot of scrappy.

So if you're ready to make some progress on your debt, you need some motivation, join Ramsey Plus, and you'll go through our step-by-step money plan with people just like you who are trying to get out of debt. It's good to have some comrades in arms, a band of brothers to fight beside as you're doing this stuff. Our most popular class, Financial Peace University, is of course part of Ramsey Plus. You connect directly with people who can hold you accountable and encourage you to stick with the plan and stay away from, as Chris says, stay away from stupid. It'll sneak up on you.

As a Ramsey Plus member, you get the tools and the practical tips you need to pay off your debt fast. The fastest possible way so that the future you're working toward will be there for you. You can get out of debt and you don't have to do it alone.

Join a Financial Peace University class after you become a Ramsey Plus member to start your free trial of Ramsey Plus and join a class. You text the word JOIN to 33789. JOIN to 33789. Taylor is in Houston, Texas. Hey, Taylor, welcome to the Dave Ramsey Show. Hi, thanks for taking my call today. Sure, what's up? Yes, so my husband and I are in baby step two.

So we started in September of this year, and we've paid off about $6,000 or so. Good. Yeah, and so the next question is, we still have a lot of debt to go, but we know we need to get rid of one of our vehicles that we're upside down on. My question is how to best go about that. So we're probably about $4,500, $4,000 upside down due to a private sale. So do I put that money towards just principal payments, or do I save that into savings until it's time to sell and then apply it to the loan, or does it not really matter?

It doesn't matter. Either one's fine. And I would count that. If that's a car you're selling, I would take $4,500 upside-down amount, put that number in your debt snowball. Okay, so just put that in the debt snowball. So I can pay. Okay, so put it in the debt snowball. So I can pay. Okay, so put it in the debt cell.

Snowball, so we have debt smaller than that at this point. So should we just make payments? You have what now? On Snowball, we have a few credit cards that are below that amount. Yeah, well, you'll knock them out before you do this car deal probably. Okay. And then I would knock out the car. Save up the $5,000 to get out of the car, right?

Or pay it down $5,000, either one. Get rid of the car. And, of course, you've got to get your little beater car to get around in, too, right? Yeah, well, we're just going to go in one car because he gets a work truck. So I work from home. So, like, yeah, he can just take my car to get there if he needs to. Yeah. Okay.

That makes me feel better because putting that money in savings kind of scares me. Or it doesn't really scare me. I'm like, ooh, I could apply this year because putting that money in savings kind of scares me. It doesn't really scare me. I'm like, ooh, I could apply this year because we've gone super crazy. We're doing Uber East and we're doing all of that fun stuff. So we're really excited, but it's also really scary just to put that money aside and then apply it all at the end. Yeah, you're doing so good, Taylor. Yeah, you guys are doing a great job. Yeah, keep working your debt snowball.

Like keep that money as it comes in, keep it moving directly toward the debt. Everything but $1,000. And what that's going to do is help you stay on the path so taylor proud of you all this is the time of year don't let your guard down stupid is lurking around every corner so be intentional yeah um i've also noticed you can't let your guard down on food this time here food and money why you had to get all fat and broke all of a sudden you had to get this time of year ramsey you said i went to meddling then yeah i'm i'm on salads right now which is frustrating because salad isn't the food salad is a promissory note like more food is coming and so i'm having to adjust my mindset especially if you're from the south when salads are served gravy on salad in the south see i think we found your problem all right jocelyn is in sacramento hey jocelyn what's

up hi dave hi um chris how are you guys great how can we help um i'm calling actually because i'm a little bit in a financial situation and and I was really, really hoping you guys can help me out. So me and my husband purchased our first home last year in November, and now I've lost my job, and we literally cannot make ends meet. And I just kind of wanted to see what was your input. We did get the health evaluated, and it and actually at a lesser value now um and then the forbearance that we're currently on adds adds on to it actually so um that's kind of the situation i mean i kind of want to know you owe more on the house than it's worth yes why because you

haven't been paying payments through the? No, not since November. Since April. Okay. Both of you lost your jobs? One of the balance plan right now. I'm so sorry. What was that? Both of you lost your jobs?

Just my husband. I mean, just myself. My husband's the only one providing right now. What's he make? He makes $55,000 a year. And how much is your house payment? $2,600. Good Lord. What did you make?

I bought the same thing that he did. You had a high house payment before. I know. And now it's like ultra high. Okay. Yeah. It's a little scary. We do have a little bit of money put for savings.

What does the forbearance sound like? You're just not paying payments, right? Yeah, I'm not making any payments. That's not really a forbearance. That's just default. Yeah, exactly. Because at the end of the day, you're still responsible for that money. So,

have you talked to the lender? Have you tried to sell the house on a short sale? Yes. Yes. So we were actually in the process of a short sale. However, the agent that was supposed to be helping us, he wasn't very honest. He actually falsified some paperwork, and I no longer felt comfortable with him. So I actually terminated that um that

process because I yeah you need to start the process over with a good real estate agent get rid of this house because this is not going to end well you can't just sit and not pay payments indefinitely eventually this is going to end yeah and you've got to work through the lender to get approved for a short sale. Yes. Go ahead. I was going to say, Jocelyn, not only do you have to work through that process, you also need to gain agreement on what's going to happen on the dollar amount that is short. Like they need to give it in full writing. You need a real estate agent that has experience in dealing in short sales.

You want to do a loan without, I mean, a short sale without recourse. That's right. You're not on the hook for the balance. What kind of loan is this, FHA, VA, or conventional? It's an FHA. Okay. All right, so here's what you've got to do. You need to get online at DaveRamsey.com, click on ELP for real estate,

find an endorsed local provider in your area that we recommend. They've got the heart of a teacher. Interview two or three of them over the phone and ask who's got some short sale experience. Short sales are not as hot right now because the market's so hot. Even in Sacramento, the market's so hot. I'm really surprised you're upside down on this house. It's very unusual in that market.

And so either way, I'm going to get this house on the market and get it sold, short sale. And you've got to put a lot of effort and a lot of time and a lot of energy with the agent into causing that to happen. Because this is going to not sneak up on you. It's going to creep up on you and knock you in the back of the head. This is not going to be pretty. You have got to deal with this. And so get this stinking house sold. If you do not get it sold your worst case

scenario is if you don't pay payments they're eventually just going to take it it is california and it takes forever to execute a foreclosure there so you may be three or four years behind before they get around to it particularly in a pandemic so but that doesn't mean it's not going to come and all of a sudden so to speak you're going to have a problem and it's not really all of a sudden so let's get this thing sold and let's get you re-employed and then don't get into a house payment the stinking 50 of your take-home pay again that was just nuts even before you lost your job. This is The Dave Ramsey Show. We'll be right back. In the lobby of Ramsey Solutions on the debt-free stage, Justin and Heather are with us. Hey, guys, how are you?

Good. Welcome. Where do you guys live? Attica, Michigan. Awesome. Good to have you. Welcome to Nashville. And how much debt have you paid off? $72,260. All right. Love it. And how long did that you paid off? $72,260. All right. Love it.

And how long did that take you? Eight and a half months. Good for you. Wow. And your range of income during that time? Well, we're self-employed. So in 2019, we had $80,000. And this year, we're projected to make between $115,000 and $120,000.

Wow. Very good. Excellent. What do you guys do for a living? I'm a carpenter. Home remodeling and stuff like that. Okay, very cool. So tell us, what did you pay off? Well, we had $2,000 worth of couches, $5,500 for a classic car, $6,600 for a dirt bike, $9,800 for another classic car, $10,500 for a dump trailer, and $37,800 for a student loan. Wow. Sounds like somebody had some toys. Well, I'll take full responsibility for that one.

Hers was only the student loan. I wasn't thinking about her. Yeah, you're right. That's so great. Somebody has to be responsible. So you must have had some money in savings or you sold something. We sold about $24,000 worth of stuff. What did you sell?

We sold the 54 Hudson Hornet. And Justin sold the brand new dirt bike that he got. He didn't even get to ride it. Oh, my gosh. So since we're in Michigan, we bought it in November, and it was gone by the end of March. So, no time to ride in the winter. Yeah. And then we also sold some tools that he had laying around and a boat.

Oh, wow. Wow. So, you sacrificed some real stuff here. Justin, what happened? What caused you all to get this serious? Well, you know, stuff is just stuff. You know, I look at the kids every day, and I don't want to, you know, I want to give them a means, you know, show them, teach them, you know,

so they can provide for themselves and better themselves. And I think, you know, with owning our business, by the time the end of 2019 came, we had all those loans. And Jus was working for a contractor that when he paid, it paid really well. But getting him to pay was a job in itself. And so trying to float, paying our subcontractors, keeping the business going with buying materials and the expenses for it, and then also paying ourselves. The weight of that got really heavy. And we were working basically for nothing. And I think that the other thing too is we realized we had our priorities wrong and that

we needed to put God first. And once we put God first in our life, then all that stuff just became stuff. It didn't become the source of contentment that we were looking for. And so once we did that, it was like the floodgates opened. And it's like you say, you know, when God realizes you can manage a small, then he gives you more. And as the year went along, we couldn't believe, like, the profits that we were getting from these jobs. And we were like, did we always get this much money and just blow it? Or, like, I—

We know the answer to that question. Yeah. And we had a few bumps up along the road. In July, I got into a car accident. And so we were pretty thick into it, and we were really close to being done. And Justin had an 85 Chevy Suburban laying around that had no air conditioning. The radio didn't work. And it was not my first choice of car but um I factually named her Bertha

there you go and drove her with pride because we were not going to get another loan um and actually we ended up getting the car back and seeing the progress that we had with so little left on the student loan I was like I don't care about getting it fixed up like let's take the money that we were going to use to fix up the car and I don't have to see the outside of it. It's fine on the inside. And we tacked it on because we just saw how fast it would progress, like, getting out of debt sooner. So when it originally started, we thought it was going to be two years. And I convinced him it would only take 18 months.

And then it turned into a year. And then as we just kept going and just kept piling and looking at everything that we could sell, it just turned into eight and a half everything that we could sell uh it just turned into eight and a half months and we were done it kind of turned into a game i mean once you turn loose of things yeah emotionally then it's like okay how can we what's the it's like tetris where can where can we set this money to make it get to make this debt snowball roll yep and i was listening to your show and you had um someone on and he said something that really struck a chord. It was that God's not a transactional God.

He's a relational God. He's not just going to give you the $70,000, but when you commit to it, he gives you a way to do it. Justin had lots of opportunities for work. We had all this stuff that became such a burden, became a blessing in a way, because it became a means to get out of debt and get out of uh the mess that we had made very cool and justin you talk about your kids being your motivation how many kids you all have we have three how old are they um five and a half okay almost four and almost two huh so and and the stuff is just stuff you don't you know okay i don't have a brand new dirt bike i have a 20 year-year-old dirt bike. I have a 25-year-old car. It gets me to work the same way.

That's right. So what's it really matter? That's right. Got your priorities straight. Well done. How's it feel to be free? It's amazing. When we sit and look at, you know, like all we have is just a house payment,

you know, it's just such a weight lifted off. And, you know, being able to show that for the kids too, know we're starting to teach the five-year-olds all right about giving and saving and spending and she's got her chores around the house and she just went and bought her first toy from earning her eight dollars of dishwasher yeah i love it you guys are incredible well done heroes very proud of you what do you tell people the key to getting out of debt is well being on the same page because we've actually known about you for 10 years and we were ramsey-ish for 10 of those years we actually met you seven years ago at your other building and we get on board but then you

know doing this is it's a commitment and you know like i it it was something that we didn't think we'd be able to do and we thought we were better than the average person because we did have $1,000 in our emergency fund. We did have a loose budget. And, you know, we would get a loan. We'd pay it off early. But then we'd go and get another one. And then we'd go and get another one.

And, okay, well, after this one, we're going to get into it. And we never really did. And then finally when all that kind of just weighed down, you're like, okay, we got to do it. Got to knock it out now. Got to do the recipe the way that it's made. Yeah, you're like, okay, we got to do it. Got to knock it out now. Got to do the recipe the way that it's made. Yeah, you kind of get disgusted after some point. Yeah.

And it's just like game on. You're working until all hours of the night and nothing to show for it. Feel like a rat in a wheel. Just run, run, run, run, get nowhere. Yep. Well done, you guys. Very, very proud of you. We got a copy of Chris Hogan's book for you, Everyday Millionaires.

That needs to be the next chapter in your story. And the kiddos join you for the debt-free scream. What are their names and ages? This is Addie and she's five. This is Emerson and she's almost two. And this is Hudson and he is almost four. Wow, you got a house full.

This is awesomeness right here. Well, you've changed your family tree, guys. I'm very proud of you. Very well done. Very well done. All right, Justin, Heather, Addie, Hudson, and Emmy, $72,000 paid off in eight and a half months, making $80,000 to $115,000. They sold everything that wasn't nailed down.

Count it down. Let's hear a great debt-free scream. Three, two, one. We're debt-free! Well done, you guys. Oh, wow. Very, very well done. Absolutely.

These young people, these young kids are going to have a whole different future now. Mom and dad have taken back control and have a path and have clarity. And that's fantastic. You guys just started a legacy. And that's amazing. It is amazing. You're looking at a family tree that got changed. Those of you watching on YouTube, and I got to tell you, that's a real thing.

It really happens. Yes, it does. And, you know, Rachel Cruz was born the year that we went broke. And we started understanding these things. And, of course, our older sister Denise was a toddler. Our marriage is hanging on by a thread. Cruz was born the year that we went broke, and we started understanding these things. And, of course, our older sister Denise was a toddler. Our marriage was hanging on by a thread. That's the year our life was changed.

We said never again. Never again. And now Rachel's got kids with us. And, you know, the family tree changes. You are changing it, but you have to make a decision, and you have to draw a line in the sand and go, that's it. We're done. That's right.

We're done. And you don't have to drive a 20-year-old something the rest of your life, but you do until you don't. You got to make those sacrifices. It's a requirement. You got to do it until you don't got to do it. That's it. And you pay cash for it as you go.

That's the way it works. Very well done, you guys. We're proud of you. This is the day ramsey show Thank you. our scripture of the day second timothy 3 16 and 17 all scripture is breathed out by god and profitable for teaching for reproof for, and for training in righteousness, that the man of God may be complete, equipped for every good work. Zig Ziglar says, what you get by achieving your goals is not as important as what you become by achieving your goals. Open phones at 888-825-5225. Chris Hogan, Ramsey Personality, is my co-host today here on the air. You jump in, we'll talk. 888-825-5225. Fort Knox, Kentucky. David is on the line. Hi, David. Welcome to the

Dave Ramsey Show. Hi, David and Chris. Thanks so much for taking my call. Sure, man. What's up? Hey, so I am, if everything goes right, starting law school this upcoming fall. Now, unfortunately, I don't have the money to cash flow it, but I am in the National Guard, and they do offer a student loan repayment program if I reenlist. Now, I have money for this upcoming year to max out my Roth IRA, and I guess my question is, should I still invest and rely on that student loan repayment plan for the Guard, or should I stop investing and start saving to pay off law school? Well, law school is an investment also,

a better investment than a mutual fund. So I would stop all investing and cash flow everything, and you'll get the money anyway from the National Guard, and then that will just cash flow the next semester or the next year. Okay. Well, so the student loan repayment program, I won't really see the full fruition of it until about five years after law school. So I guess that eight-year time frame is just worrisome, but that makes sense. Why will you not see it until five years after?

So in order for it to actually be applied to my law school loan, I'd have to reenlist after law school is done. And then they don't start paying on it for another year. So it would be at least four years before I pay any money. Okay. Okay. I got you. Yeah, I'm going to do everything I can to cash flow law school then. And then when that money comes, it'll just be a repayment at that point.

Yeah, absolutely. Because, I mean, they're going to do that program. They're going to follow through on that without a doubt. Yeah, that might change your plan a little bit, but either way, that's what I'm going to do. And congratulations. Well done, and thank you for your willingness to serve. Open phones at 888-825-5225. Zach is in Redmond, Washington.

Hi, Zach. Welcome to the Dave Ramsey Show. Hey, Dave. How's it going? Better than I deserve, man. What's up? I'm good. Hey, so my wife and I, in the last year, recently bought our first property.

We graduated two years ago, and our mortgage broker reached out to us and said that she could save us like $400 by, I guess, interest rates being low and all that. She said something in her explanation about rolling over all of the money we'd paid into the mortgage into this new one and how that made her not have to, I guess, get the house reassessed. I didn't quite understand everything, and so I don't know if the $400 is all we're looking at or if there's other, I guess, side effects. Is this an FHA loan?

Yes, it is. Okay. What she's proposing is what's called a streamlined loan, and the interest rate is a little higher than marketplace interest rates are. And then with the interest rate being a little higher, they offset that and they don't charge closing costs. That make sense? Not sure. Not totally. that make sense not sure not totally uh so i'll tell you uh our original loan was like 585 at uh 3.8 something percent um and she is proposing like 2.99 percent would be the new thing

um i guess in my head it it made sense that with such a lower interest rate on such a high amount of money, it would end up costing us less, but obviously I don't know. What I'm saying is the interest rate you have today is what? $3.875, I believe. And they're quoting you what on the new one? $2.875 or $2.9. Okay one percent change depending on credit and you have any closing costs on the quote you got um she said that they were going to cover any upfront costs and but i did take a look at the she said it would cost about 3 000 on the tail end of the

loan like i would just pay it over time oh they just rolled the closing costs in okay so it's not a streamline okay streamlines they don't charge closing costs on and the interest rate is higher but 2875 is not a not an above market rate so that's about a market rate and so that puts you in pretty good stead there um so you're saving one percent on uh five hundred $500,000, which is $5,000 a year in interest. Okay. And if it cost you $3,000 on the back, it was worth it. Okay, so this is absolutely something we should do is what I'm hearing. Well, the scenario Dave just laid out for you is the scenario you should do. I don't know what your person was talking about.

Sounds like they're talking around you instead of to you. So I'm going to reach out. If I'm you, I'm going to reach out, talk to Churchill, talk with him about what you're looking to do and understand the difference. Yeah, call Churchill Mortgage and get a different quote and see what they can quote you and see how that compares. And also try to get a little bit better explanation as to what you're getting into.

The typical thing you'll have is you will have some closing costs. And if you have the equity, you can roll the closing costs in, meaning you borrow them. They come off the back end of the loan is what it amounts to. They are, they're added to the loans is all it is. And that's okay to do if you're in baby step two. It's not a problem at all. But because you're saving, you have nothing out of pocket or virtually nothing out of pocket,

and you're saving $5,000 a year in interest. And you can go ahead and you should go ahead and make it a 15-year fixed, which means you're probably not going to save $400 a month anymore. Right. But you are saving $400 a month in interest. It'll just be going towards the principal. That's right, and you're getting rid of 16 years. And also with FHA, we've got to keep our eyes open, you all,

because now that PMI, private mortgage insurance, can be on those loans for life. Okay, so you've got to go into it. You've got to get the right people on your side so you know what product you're dealing with and what makes sense for you. Yeah, that's exactly right. Chris is in Milwaukee, Wisconsin. Hi, Chris. Welcome to the Dave Ramsey Show. Hey, guys.

How are you? Better than I deserve, sir. How can I help? Hey, so I have a bridge account slash investing question for you guys. Thanks to both of you. My wife and I paid off about $400,000 in student loans last year. Wow. Together, we make about $400,000.

And so my question is, you know, right now I max out my 401k Roth of 19K. Yep. And we have all this extra money coming in. I hate it when that happens. And trying to figure out where to put it. I have a combination of $300,000 in rollover and Roth IRAs. And so my first question is a tax question. I have former employee 401ks that are now in rollovers.

Can my wife execute the backdoor Roth and avoid the pro rata rule? And then my second question is, is it even worth doing any of that for the backdoor Roth on her end? You both can do a backdoor Roth, and the pro-rater real estate doesn't have anything to do with it when you do a backdoor Roth. Sharon and I do a backdoor Roth every year. Got it. So the rollover IRAs don't impact that?

No, they do not impact that at all. No. Okay, got it. And Chris, what baby step are you on? We're getting close on time. What baby step are you guys on right now? So we just want to figure out how to invest the 15%, and then we're going to go start paying off the house.

Okay. All right. Well, and the beauty of it is, is doing the 15%, this is what I was getting at, do the 15%, then you need to turn your attention to the house. Once the house is paid off, now you can begin. But getting to 15% of 400, he's got a lot of gyrations to get there. Yeah, yeah. But reach out, get with a smart investor pro, and sit down.

I'm proud of you guys. Wow. Getting rid of 400,000 student loan debt's a big deal. Absolutely slayed it, man. Very, very well done. All right, Chris, good show today. Thank you, sir. It's fun.

James Childs,s our producer well done kelly daniel our associate producer and phone screener great show i am dave ramsey your host we'll be back with you before you know it in the meantime remember there's ultimately only one way to financial peace and that's to walk daily with the prince of peace christ jesus Christ Jesus. This is James Childs, producer of The Dave Ramsey Show. You can listen to Dave, Rachel Cruz, Chris Hogan, or the rest of the Ramsey Network anywhere with the Ramsey Network app on your smartphone. Catch all of our full shows, browse by topic, or send clips to your friends. Head to the App Store and download the Ramsey Network app today.