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How well do they know the area? With a 15-year mortgage at a 5% interest rate, your monthly payment would be around $2,500 (thats only principal and interest). Dave Ramsey is a man of strong opinions, especially when it comes to retirement. See how much house you can afford with our free mortgage calculator! Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of "The Dave Ramsey Show," heard by more than 16 million listeners each week. If youre going the mortgage route, work with a home loan provider you can trust to get a preapproval letternot having this could cause sellers to overlook your offer. And well show you how. Dont work with an amateur just because you want to be nice, and dont give your business to a friend or family member. Life is all about taking control of your finances and making smart choices! Keep in mind: Saving a down payment is not the same as investing for retirement. For freaking good. Hows that for being a smart shopper? Here are some other ideas to help you save money fast. Rachel writes and speaks on personal finances, budgeting, investing and money trends. A nonnegotiable for both of us was a good school district. When you think youre ready to buy a house, start saving for one. Dont forget: Buying a house also means youll be moving! A 20% down payment is ideal since it means youll avoid paying for private mortgage insurance (PMI)a fee that insures the lender (not you) if you dont make your mortgage payments. Dont rush into a big purchase just because your broke friends (or broke family) keep telling you that you should. To budget for this house in two years, youd need to set aside $1,700 each month ($40,000 / 2 years / 12 months = $1,700). That 25% limit includes principal, interest, property taxes, home insurance, PMI and dont forget to consider HOA fees. Make sure youre really ready to put down roots before you buy. 2023 Lampo Licensing, LLC. Rachel writes and speaks on personal finances, budgeting, investing and money trends. But it pays off when you start your home search because a preapproval letter shows that youre a serious buyer. We only endorse the top agents in your area, so you can trust your ELP to negotiate the best deal on the house thats right for you. When youve worked so hard to save up a big down payment, the last thing you want to do is make a bad financial investment. Your income is your most powerful wealth-building tool, so set it free by putting debt to rest. Bring on the hand cramps . The bigger the down payment, the less youll owe on your mortgage! Try these tips. Thats why we created our RamseyTrusted program. (Ive never lost a patient!). Whether you should buy or rent a house depends on your financial situation and personal goalsnothing else. Picture this: When you buy a home, your landlord is you! A detailed plan in place to guide you through the next five steps of the process (which were about to go over). Remember: Youre in charge of how gazelle intense you want to be.