The Ramsey Show - App - Is House Hacking a Good Way To Make Money?

Episode Date: May 24, 2022

Rachel Cruze & George Kamel discuss: If you should use extra income to pay off debt or invest, Moving for a job and finding a house, Struggling to make ends meet each month,  If house hacking is a good idea, How to re-finance student loans. Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6

🎵 Live from the headquarters of Ramsey Solutions, this is The Ramsey Show, where America hangs out to have a conversation about your life and your money. So it's a free call anywhere in the country at 888-825-5225. And I am Rachel Cruz, co-hosting today with Ramsey at Personality, George Hamill. All right, we're going to go right to the phones this hour.

And Maria in Lexington, Kentucky is up next. Hey, Maria, welcome to the show. Hi, thank you so much for taking my call. Absolutely. How can we help? So my question that I have is we are debt free, my husband and I, and we have about $70,000 left on our mortgage. That's our only sort of debt. We already have our six-month emergency fund, and I have been working a lot the last year and a half., we also have $20,000, um, for our next car

fund. We have older cars. Um, one is 20 years old, the other one's 13 years old. And so we've just been kind of putting money away for those. Um, so my question is, um, do we take our extra money that we have, which is basically $73,000 between the car and the extra extra, and do we throw it at the house? Do we throw part of it at the house? Part of me would love to be completely debt free from the house and everything. Or do we put it towards like retirement? Do we we have three kids that are ages four, five and eight. Do we like put some towards extra college fund?

We just don't really know what to do with money right now. How much do you guys make a year, Maria, combined? Combined, we are around $110,000. Usually last year we made $160,000. Oh, wow. Awesome. That's great. I work a lot of extra.

Are you guys funding retirement now? Yes. We are putting probably about 20% away for retirement okay and have you guys started any college funds for the kids yes we do have college funds um going that we started when they were each born so we um we put some towards that every month um but didn't know if like we should put like a chunk um towards it more towards it. You guys are doing great, Maria. Doing amazing. You know, your cars, you're going to have to replace those soon.

Yeah. And so for me, that would be, because I mean, you guys are on Baby Steps Classic, four, five, and six, and you're doing everything. You're funding actually a little bit more into retirement than you need to be. You could even pull back some of that to 15%, which would free up even more cash to throw at the house. Your kids' college funds are funded. And I would just double check maybe with your SmartVestor Pro or your investment professional who you're working with just to make sure that those are on track, looking at inflation and tuition rates and kind of where how that money is going to grow and just double check that.

And then what's left there, yeah, is the mortgage. So I think that there is a chunk of this, of that $53,000, that you could definitely throw towards the mortgage. But also, again, on this step, we talk about the intensity, the gazelle intensity, if you will, is Baby Steps 1 through 3. Now we say you can take your foot off the gas. Like you guys are okay. You're good.

You can breathe. You can take vacation. Like we say, you can your foot off the gas. Like you guys are okay. You're good. You can breathe. You can take vacation. Like we say, you can replace cars or redo that kitchen you've wanted to do. Whatever it is. If there's something in your mind that you really want to do, we're not going to be mad if you use some of that money for that. But if you guys, if everything else is covered, man, the thought of throwing $50,000 at that mortgage and be like, man, we only got $20,000 left. I'm a nerd

and so I'm probably throwing it all at the house and dialing back. Even the car. Even the car fund. Here's my thing. You're going to be able to save up for a new car real quick when you don't have a mortgage payment. Making $110,000. I'm not mad if you hold off and leave that car fund because I don't know what

the shape of your cars are in, but if I'm going, I could drive this thing for six more months. And so what I did personally, Rachel, is I dangled the upgrading car in front of me as we paid off the house. So that I'm not going to upgrade the car until we pay off the house.

Once the house is paid off, then I'll save up and get the car I really want. And we were able to do that really fast without a mortgage payment. So I think either way, you're going to be fine if you save this car fund, put the 53 towards the mortgage, you're left with a $20,000 mortgage

that's gone within the next, what, seven months? No, you only have a $70,000 mortgage. Is that right? $73,000 mortgage. Yeah. And you have 73 total saved. You have 53. So you could pay off the house today if you wanted to, which leaves you with no car fund. Correct? Yeah. Which is what you would do though, George. Which is what you would do, though, George. Which is what I personally would do because I don't mind driving a beater and you'll have the money to cash flow or repair if you need to. And within a few months, you'll be back up to $20,000. Maria, what's your husband's take? What's his thoughts?

Well, you know, it's funny because we were completely debt-free, mortgaged and all. And then we moved right before the pandemic. And so he was gazelle intense to pay off the house, our original house. And then I feel like I am more gazelle intense to just get rid of it this time. And, he is more kind of put the brakes on and enjoy, um, not feeling like we're, you know, living on rice and beans and, um, having a little bit more. Are you guys living on rice and beans right now? Do you feel like that? No, we're really not. We're really not. Um, but I, um, I go in spurts of, okay, this is like no-spend March. Let's see how much we can save up. To pay off the house, yeah.

Yeah, you guys sound a lot like me and my wife. And that's just how we were. We were intense about it because we just felt like it and we just have that drive. Because there's a part of you that you're like, oh, Maria, what if you just wrote a check, paid off the house? Does that excite you to write a check today and pay off the house? A hundred percent, yes. That excites me, and it's not even my house. I know, I know.

I just like that idea. How are the cars? How are the cars? Is one of the cars going to die tomorrow? There is one that could potentially die tomorrow, yes, the 20-year-old one. That's pretty wild. The 15-year-old one is in good shape. But you guys make great money.

So I'm like, even if you kept $10,000 in the car fund for the one car that might die tomorrow. Split the difference. Throw everything else. The next pay period or two, throw it at the mortgage. Yeah. And you guys could be completely debt-free in three months doing that. That's what I'm saying.

Either way, within a few months, you have a paid-for house, and you can upgrade and car. There's not a right or wrong here. It's kind of just how intense you want to be. Do you want to be George Camel and say, I, everyone wants to be George Camel. Not if you're a horse lover. That's for another day.

But Maria, you're doing great. I'm proud of you guys. This is an inspiring call to hear someone struggle with a pile of cash. I know. What's your gut, Maria? What's your gut? My gut is to pay off the house. Do it, Maria.

Final answer. I think you settled it. I think you know it. I think you do it. If this was who wants to be a millionaire, final answer. It's all yours. The next paycheck, there's no payments coming out of it. I think you know it. I think you do it. And then when that paycheck comes in next, it's all yours. The next paycheck, there's no payments coming out of it. That feels good. That feels real nice.

That first one that comes through is life-changing. That's pretty great, Maria. Thanks for the call. This is The Ramsey Show. you've got a lot on your plate a job your home your marriage and your growing family while you're enjoying the present you can't help but think about your future and your finances. As you explore your options, consider Christian Healthcare Ministries, or CHM, for your health care. Their generous maternity program and budget-friendly monthly programs have been a blessing to members welcoming children into their families. Visit chministries.org slash budget to see if it's right for you.

Christian Healthcare Ministries is a Ramsey Trusted Provider. Welcome back, America, to The Ramsey Show. It's a free call anywhere in the country, 888-825-5225. Up next is Kat in Orlando. Hey, Kat, welcome to the show. Hi, thanks, guys. Thanks for taking my call. Absolutely. How can we help?

Well, I am looking at a second relocation for a promotion in two years. And the relocation package that I have through my work is very healthy. I don't want to leave the house that I'm in. I love the house that I'm in, but I feel like I would be leaving money on the table because they are covering all of the fees and whatnot for the transaction. And then they actually do the gross up at the end of the year. So there's really no tax consequences for me. But I just don't know if I've been fortunate enough that I've built even in just a year between the market and I've been doing a principal curtailment every month. I've, you know, I've got a decent amount of equity. I guess my question is, is do I now try and like downsize and maximize my down payment and capitalize on that, that, you know, equity or do I hold on to the house?

I mean, I don't want to hold on to the house. I want to, but I don't want to because I don't want to have to worry about it while I'm out of state somewhere else and then renting possibly. So I just don't know if my thinking is correct that, you know, given the fact that they're covering so much of the financial burden of a move, i.ee real estate fees and transactions and whatnot so you're still working for the same company and they're relocating you to a different city different office correct yeah different different states is this in two years is that what you said yeah okay so what's making you worry now what's what's the what's the urgency are you saying this

is your second relocation in two years? You've just moved around a lot. Yeah, yeah, and it took me forever to find the house that I'm in, and I really like it. And in looking at, you know, I'm moving from Florida to South Carolina, and the houses there are a lot different. It's going to be hard to find something that I really like. Kat, when you move to South Carolina in two years, will you be moving again in two more years? No. I would be looking at relocating to South Carolina in two years, will you be moving again in two more years? No.

I would be looking at relocating to South Carolina in about 30 days. But in South Carolina, I'd probably only be there about three years. Oh, I hear you. I would rent. If you're anywhere less than five years, I don't think it's worth it, especially where the market is right now. I'm like, you're going to be buying high. Who knows what's going to be happening in the next two years. If I were you, I'd find a great place and I would rent since you're going to be gone in three years.

But then what am I, am I leaving money on the table though? Because they're paying for the, all of the, like the real estate fees and all that kind of stuff. They're covering, they're paying all of that. So they're paying your closing costs if you sell your current home, right? Yeah. And if you buy a new one, are're covering. They're paying all of that. So they're paying your closing costs if you sell your current home, right? Yeah. And if you buy a new one, are they covering those closing costs too? Yeah, they pay like up to, I think, like $10,000 of the closing costs on the new home. I wouldn't because you could be, because think about it.

Okay, here's a worst case scenario. I mean, I'm never this person, but I want to be this person, Kat. What if you find a house in South Carolina and you're like, okay, I'm going to bid and you go get someone, you pay over asking because that's what so many places are doing right now. That $10,000 is going to look like so small compared to what you could be overpaying for a house right now.

So in my head, that's great and generous that they're doing that. See if they'll pay for all of your moving costs and see if they'll pay first month's rent, you know, transfer the same amount of money they would have paid to a rent. Yeah, will they give you $10,000? Well, yeah, so yeah. see if they'll pay first month's rent, you know, transfer the same amount of money they would have paid to a rent. Well, yeah.

So, yeah. So, I would get like a lump sum, like a modest lump sum, let's say $5,000 to $6,000. But then on top of that, obviously, they pay the labor move part. They move all the furniture. They pack move all the furniture. But they also cover all of the transaction fees associated with buying and selling on this so you wouldn't get you would get it on the sell of your house if you sold your house in florida but you just wouldn't get on the buying end if you just rent i for the hassle of it even though i know it sounds like

you're leaving my own table but it's not that much money in comparison of what a mortgage is going to be yeah i mean the mortgage the the i mean i guess it's six and one half dozen dozen of the other then i guess my question is is that what do i what do you recommend i do with that you know 130 000 that i'm going to get from the sale of this house you know should i just invest it all i guess or like yeah do you have any other do you have debt cat at all consumer debt no no consumer debt well i have a car note which to be honest i should probably just pay off i'm just a little thank you for being honest how much how much you own your how much you own your car about ten thousand okay okay so some of

that forty thousand forty thousand liquid oh wow let's just pay off the car today yeah pay off the car today and then the rest of the money um yeah i mean i would take some of it and look into um investing in just a good gross mutual because you're not going to touch this money for a few years then pardon me you won't touch this money for a few years at least well probably not until i get moved you know until i relocate again. Okay. I would imagine. If it's three plus years and you're debt free, I think it's fine in the market if you're willing to ride the wave and you don't need it urgently. So do you think I should sell the house in Florida then?

I would, yes. I would sell it. You don't want to be a long distance landlord? No, no. But everything you were saying, though, Kat, of how excited you were that they were going to pay all the closing, everything for the sale, too. So you get to take advantage of that, which is a gift. So take advantage of that.

Sell the home. Yes, get some money in the bank and invest some of that for sure. Because here's the deal. In three years. Yeah, go ahead. I was just going to say, so I did see like a duplex that was available for purchase in South Carolina. I haven't really dug into it, but what about if I purchased like a duplex where I could rent out, you know,

and create maybe some cash flow on the one side and live on the other side? Yeah, and you probably could get that for around, what was the price on that? Do you know? It was four, four something, I think. So I would make about, what, like a 35% down payment on it. Do you want to live there, or is it just like a money-making scheme? It would be to, like, generate revenue, yeah. Kat, I think you're fine financially. I don't think you need to rent out.

I mean, if I were you are you single married yeah no single okay I would go I mean I if I were you I would go find an awesome condo or duplex or um you know townhouse and a really fun part of the city you're going to be in and just enjoy it and don't worry about owning everything right now because again you're going to be there for three years you're going to be leaving anyways I would just enjoy it. And don't worry about owning everything right now. Because, again, you're going to be there for three years. You're going to be leaving anyways. I would just enjoy it. I think take a deep breath.

You're doing great. How much do you make a year? With this new promotion, we haven't got to the numbers final yet. I'm thinking probably about between $1 and $105. Heck, yeah. Yeah, Kat, you're fine. Don't get a roommate. If I were you, I don't know.

Am I sounding lazy? No. Just go and enjoy. Rachel is a free spirit spender. You've worked hard, Kat. You're going to have no debt because you're going to pay off your car today with your $40,000 you have in the bank. Sell your house in Florida. Do the move.

See if they'll pay for any of the other, you know, maybe one month's rent or two months' rent of the new place since you're not taking advantage of the buying opportunities that they're giving you at your company. And just enjoy. Breathe. Have fun. Enjoy. You're doing great. Be invested in retirement.

But that's what I do, Kat. George, what do you think? George would be like, I'd sell everything. Rachel's great because she reminds us all that we need to enjoy our life. Because when you get onto the Ramsey plan, it's like, I got it. Rachel, it's not wise. Because I could be investing the money instead of going on vacation. I could have 18 roommates and be making money every single month.

Could be a real estate guru. Or you could just live your life and not have to be a landlord next door. Yeah. Yes. Don't be a landlord next door either. I like the idea of that. Oh, man. We, yeah.

Winston and I, yeah. Yeah. Uh-oh. There was a story there and we're not going to get to hear it. Because the break is about to hit. It's too long? It's probably not even worth it. You couldn't get it in 45 seconds. No, I'm just saying being near people that rent can be not fun. Yeah, it's just, I mean, you're just like, hey,

you were late on your rent. Good to see you. Have a great Friday night as you go out and spend money when you're supposed to pay rent. That didn't happen to us personally. But it's the same. It's the idea, though, that you're living next to people. I don't like it. I want them just far enough away.

Now, if you were in debt, Kat, if you owed 90 grand in student loans and a car payment, this would be, or she does have a car payment, but a car payment you couldn't pay off right now. This would all be a very different story. I would have different opinions. But car payment but a car payment you couldn't pay off right now this would all be a very different story I would have different opinions but where you are Kat you've done great treat yourself

enjoy once you pay off the car let's get rid of that thing yeah get rid of it today you don't need it for sure get out of here get out of here Thank you. Welcome back to The Ramsey Show.

I am Rachel Cruz hosting this hour with George Camel. And up next, we have Christopher in Birmingham. Hey, Christopher. Welcome to the show. Hey, guys. Thank you all for taking my call. Absolutely. How can we help?

So a bit of a long story. It's not as much of a success story as the last couple of calls no it's okay um but um so i'm i'm a 26 year old father i have a one year old and my son is due in two weeks oh congratulations thank you thank you very much i'm extremely excited um but anyways we're we're struggling pretty pretty hard financially i've tried to do as much as i know how to do as far as making an excel spreadsheet you know budget and trying to see make sure where everything goes and make sure everything's allocated yeah where it should go and i just i always seem to come up to come up short um had, from where we bought our house in August, we had a consolidation loan to try to make sure that we could get everything into one thing. And then after the baby was born, life just kind of happened all at once.

And then the consolidation loan just became too much. So I ended up having to sell my prized possession, which was my truck that I had built from the ground up, basically sold it and paid off the consolidation loan and a little bit of outstanding debt. And I've still got some credit card debt left. But for some reason, it just seems like every every month every week that i'm doing the spreadsheet you know i'm coming up with next to nothing extra to try to snowball on these credit cards and much less put back into savings um and it's just it's just a real it's overwhelming real gamble every month and it's extremely overwhelming um my dad bought dave's book and you know he's

been trying to help me through it and we're just you know i don't know where else to turn other than just kind of go with my hat in my hand and and and ask for help oh well christopher you're doing a great job let me just say that it's a lot right now i mean how old are you guys uh i'm 26 my wife is 29 is 29. I want to get a handle on it before it gets out of control. And we want to have the ability to move back home and enjoy life and do things for our kids that we never would expect that we could do. Absolutely. And you will be able able to and that's the great thing is that first motivation point is your why and that you're sick and tired of being sick and tired

this is the breaking point this is where people get where they're like all right i am willing to do whatever it takes to turn to turn this around so christopher how much do you guys make a year um i don't know the math on that 100 i know i make um our net every month is roughly 35 to 38 she's a manager in retail okay so her hours kind of fluctuate a little bit and they're fluctuating a lot especially with the late stage of her pregnancy and doctor's appointments and stuff like that. But I'm on salary, so I make right at $2,400 a month by myself. So your take-home pay is about $45,000 a year? Somewhere around there. Mine is, yeah. Mine's $45,000.

Okay, so Christopher, I'll just give you just the stats. The average household income, dual income, was $65,000 last year. So you guys are living below average when it comes to just a combined household income dual income was 65 last year so you guys are living below average when it comes to just a combined household income um what kind of job what kind of work do you do uh i'm an athletic trainer i work in uh sports medicine okay cool at a local gym or high school or work for a local it's a um i work for a physical therapy company, but they outsource us athletic trainers to be full-time care at the local high schools or colleges. I work at a local high school to provide health care for the kids. Okay.

And what's your work? How many hours a week are you working? I'm working right around, it fluctuates. During football season, I'm working right at 60 hours a week, and then during not football season, I'm probably right around 25 to 35. Okay. How much debt do you guys have currently? We have a little over 12. Okay. Do you think once you got out of debt that you would find that margin?

Are these payments killing you? What do you mean that margin? Because you said you're doing the budget, but there's nothing left in the month. Is that because it's going back out to payments on the debt? Yeah. Or are there other issues? Everything is going out to payments. It's going back out to payments on the debt yeah are there other issues everything is going out the it's going out the payments like it's going out towards is your mortgage too high credit cards no my mortgage is fine i haven't i'm able to make the mortgage every month

what's the mortgage what percentage of your budget is your mortgage uh percentage uh what are you guys paying for your mortgage yeah well yeah we're paying we're paying 977 for it okay so that's reasonable considering your take-home pay that's not the problem i'm just looking to see where the problems are at because when you do the budget there's more there's just a lot of money like little payments and stuff going out all over the place with i've got three credit card payments we've got daycare that comes out every week. It's $180 a week for daycare. And then we've got hospital bills from where my last one was born,

and we're going to end up racking up more from this new one. Okay. And this all adds up to $12K, all of your debt, credit cards, medical bills, or is there more? Yeah, that's everything other than my wife's car payment. Oh, what's the car loan? The car loan, I think she's down to $9,500. Okay.

Left on it, but the payment is $294. Okay, and that's on top of the $12,000. Yeah. So we're looking more like $22,000 in consumer debt. Yeah. Now I'm starting to get a real picture of where the struggle's coming from. Yeah. Well, there's a few things you can do.

Obviously, we need to get rid of this debt, and having those payments freed up is going to help you guys immensely. But the other thing you need to do, I would get on to EveryDollar instead of the spreadsheet and see if that helps you because we'll gift you the premium version that's inside of Ramsey Plus along with Financial Peace. And so you guys can track it. It'll be connected to your bank. And you need to really stare at every penny going out going, where could we cut? Where could we cut? How do we bring more money in? That's how you're going to create that margin to do the debt snowball. And to Christopher, I would say upping your income. So really the two ways

that you're going to see movement the most is cutting the budget, but there may not be a ton. There could be some to cut for sure, but there may not be a ton just seeing what you guys make a month, knowing all of your expenses from daycare, food, everything. So, but the, the other end of the, of the spectrum is your income. And that's what I would wonder is, Hey, you got, I mean, you said during, you know, during certain times of the year, you're working crazy hours versus it goes down when it's not, when you're not in season. And so it's either looking at Christopher,

which could be very uncomfortable for you, but just like, Hey, what's a totally different job? Because what people are paying right now for workers and for wages, it's insane. It's insane. And so what would it look like to go to a completely different industry just to get your head above water? Even if it's something that you don't really want to do, you don't love it, but they're paying $50,000 a year. Hospitality, retail, I mean, they're paying 50 grand a year yeah um hospitality retail i mean they're paying 15 because this 45 000 is household income so that includes your wife's which means you're making even less than that so you could be you know i'm not sure what you're

making but it could be around 35 000 30 000 so um i just think you could you could be making more and again this is not a forever move but there is these extreme measures that you guys are going to have to take because you're kind of in an extreme situation where you guys have have a lot of debt again your shovel's not huge um with your income and so there's something to be said about man what if we just turn the tables and i know you have a new baby coming so maybe you wait until that until mom and baby and everyone is good and then maybe you just make a leap and say hey hey, for 18, 24 months, we're just going to go crazy and we're going to cut the budget. We're going to do every dollar and stick to it. I'm going to see what extra job I can either take on or maybe even move industries completely and just say, man, I'm going to just take a higher

paying job for now just to get some traction. And then you could look up in 24 months and be like, okay, we can breathe again. This feels good. And then I can go back and do what I love when it comes to this. But maybe there's something even within your skill set, a different position that you could do. But that income, I would look to see getting that up. That's what's going to help you get your head above water. This is The Ramsey Show. scripture of the day is the fruit of the Spirit is love, joy, peace, patience, kindness, goodness, faithfulness, gentleness, and self-control.

Galatians 5, 22, 3. As I grow older, I pay less attention to what men say. I just watch what they do. Andrew Carnegie. So it's been proven over and over again that you can crush your financial, your personal, your professional goals. So whether you want to pay off debt, land that dream job, or build better relationships, you really can make it happen. And so we're putting our number one bestselling books and tools in the Ramsey $10 sale to give to you the

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Thanks for taking the call. I'm excited to talk to you today. Absolutely. How can we help? So I feel like I'm jumping on the bandwagon here and talking more real estate with y'all. We love it. The situation is that I've got an opportunity to buy a triplex to where I'm moving up in New York next month.

I'm moving for work. And let's say, you know, the worst case scenario is it's just me in the building, right? At that point, it would be about 40% of my take-home pay to cover the whole mortgage. With one tenant in there, it would be about 20%. And with two tenants in there, including me, I could live for free. I have no other debt and I make about $120 a year. And I've been looking around. I haven't really been able to see what the Ramsey family insight is into house hacking, as the real estate community calls it. Yeah, house hacking.

Yeah, we've got some of these calls before. Usually they're, how old are you, Joe? I'm 32. Okay. Usually it's younger guys, guys in their early 20s. They've got no money to their name. They've got a pile of debt, and they're calling us going, hey, should I do this house hacking thing?

I saw it on TikTok, and I can make a bunch of money. Your situation's a little bit different. Yeah. How much money do you have to put down on it? It's the federal loan, so it'll be going, you know, real low, 5%. I could put down, you know, 10, 15, but that would be most of the reserves I would have for, you know, maintaining the house in, you know, catastrophic scenarios.

The numbers you ran, is that on a 30-year fixed rate? It is, yeah. Okay. Well, that changes my answer slightly. I'm not a fan of a 30-year versus a 15-year. Do you have any other debt, Joe? Do you have any debt? No.

I have no debt, and I've got about, you know, 75 in non-retirement accounts and about 200 in the retirement accounts. Okay. And will you be in New York for the long term? Like do you see for the foreseeable future that's where you'll be? You know, the current contract is three years. So we'll see what happens at the end of the three years. Oh, man.

We just had a call so similar to this in the the last segment yeah i don't know i i just for me getting into something that's again the math you could make it work here but i think there's just hassle in buying something especially when it comes to real estate in new york i'm like um i don't know since you're there short term, I don't know if I would fool with it, but George may have a different opinion. My person, I just personally wouldn't do it. Is your life going to be over if you make this move?

No, it's just not what I would do. It's not a, the Ramsey plan is we do 15 year fixed rate, have a good healthy down payment and have the payment be no more than a quarter of your take home pay. Now you're seeing the upside of, well, if I get these renters in here that are on time, that are reliable, that don't cause a lot of issues, and there's zero maintenance to do, I'll be okay. But when I look at it, I also see a whole bunch of risk involved. And I'm never going to steer someone towards a 30-year fixed rate because,

Joe, you're 32, you have a long, full life ahead of you. I don't want you to be tied down with a mortgage. And I know people say, well, Rachel, they're paying the mortgage for me. It's free. Nothing in life is free when it comes to real estate. There's always going to be maintenance, repairs. You've got the mortgage, property taxes, insurance, you name it, extra liability with these tenants. So if you can swing it on a 15-year fixed rate and you had the same numbers, I'd go,

okay, I feel a lot better about that. And if you had a healthy down payment, I'd go, I feel better about that. But at the numbers you gave me, it makes me a little uncomfortable. You're just right on that line, Joe, a little bit of like, oh, I could go, it could go south really quick

and you're going to regret doing it. Would you cash out the 75 non-retirement to do it i don't think so because then you know i'm riding strictly on uh just on my monthly i mean on my on my w-2 so you're 75 is what you're seeing here of reserves you're saying the 75 is your reserves yes but it's currently invested it's currently invested. It's in, you know, it's in mutual funds, just like regular, you know, highly liquid mutual funds. Yeah.

I mean, if you cashed it out and that became your down payment, you could do a 15 year, I'd feel a lot more, like there's a lot more breathing room for you. So that's what I would do personally. Again, we treat calls of what we would do if I woke up in your shoes

and that's what I would personally do. Yeah. There's just a lot of factors and I know it sounds exciting and kind of like, oh, cool. Okay. I could get this and this and this and this and it would work so well. And could it work? Absolutely. It could, but also could go downhill real quick. So if you were to do it, it would be on a 15 year fixed rate mortgage. Yeah. With no more or with a bigger down payment. So I would put down 10% to 15% there. And then you've got to just be real sure that you'd get roommates in there,

but hopefully that would lower the percentage of your mortgage of what you would pay. But all of the math needs to work really well for us to feel good about it. Or you're just dealing with a lot of hassle and you could be a little bit hassle-free. All right, up next is Fred from El Paso. Hey, Fred.

Welcome to the show. Hey, guys. Thank you so much for taking my call. I appreciate the time. Absolutely. How can we help? Yes. So my question is, my wife has some current student loans.

We're trying to pay off. That's the only debt we have. We would like to know if it's a smart move to go and refinance those under my name because my wife is a homemaker. So she's right now with our baby. So I just want to make sure if it's a smart move or if it's not. What would the benefit be of refinancing the loans into your name? Probably just the interest rate. I mean, that would be the only benefit, but I'm not sure if we have one at 7%, another one at 8%. She's got like 10 different loans. So mean, that would be the only benefit, but I'm not sure if we have one at 7%, another one at 8%. She's got like 10 different loans. So again, it's just, I don't know what

would be the best move. Now, are you talking about consolidation or refinancing? Either one. Honestly, I haven't thought about either option. So just kind of some guidance there. Okay. Well, I would not do consolidation because you're just moving things around and paying for it. But you can look into refinancing. There's a company that we've recommended in the past, Splash Financial. And if you can do it and there's no fee to you, so it's completely free to refinance, and you can keep a fixed rate or get to a fixed rate, I assume they're on a fixed rate, and you can lower the interest rate, then I feel good about it.

Now, if they're going to sign you up for a longer repayment period to do it, not a good idea. Yeah. And there's no benefit even, Fred, for you to refinance under your name versus hers. You could just keep it under hers. Now, if she doesn't have an income, I don't know what the terms would be, which I think is part of his question. If you're a homemaker. I would contact Splash Financial and see what they can do. And if they can give you a lower rate and keep your repayment period and keep it fixed, then I feel good about that. Yeah, and debt consolidation, the only type of debt we say that is okay is student loans because you're tempted – because a lot of people use debt consolidation, Fred, to move the debt around like George just said. And it feels good because it's like, oh, I'm doing something when you're really not doing something.

But if you can consolidate all those, get a lower rate, even them together, you could do that. It's not terrible. But keeping them separate is great because you can pay off that smallest one first and keep that momentum going. That snowball magic. Yeah. So definitely look into the refinancing just to see if you can get a lower interest rate.

But great question. Thanks, Fred. All right. This hour of the Ramsey Show and the books. We did books. I never said that line, but I like it. Thanks to Austin, Kelly, Will, and Zach for being great there behind the booth. George, fantastic show. Always a pleasure. So great. Thanks for co-hosting. Thank you, America, for listening. This is The Ramsey Show. Hey, it's Rachel Cruz, co-host on The Ramsey Show.

If you want to do your debt-free scream live on the show, visit ramsaysolutions.com slash debtfreescream. We'd love for you to come to Nashville and tell Dave your story. That's ramsaysolutions.com slash debtfreescream.