Dave Ramsey would not mince phrases when he offers recommendation.
The private finance persona lately encountered a lady who requested for his knowledge a few plan she had in place for her grownup kids.
DON’T MISS: Dave Ramsey Has Plain-Spoken Prediction About the U.S. Dollar
The lady, who known as the Ramsey Show from Charlotte, N.C. and stated her title was Debbie, defined the state of affairs.
She and her husband have two grown kids, Debbie stated. One is a daughter, who’s married, and rents a house independently. The different is a son, who lives with the dad and mom, however pays lease.
“They both would love to be able to find homes of their own,” Debbie stated. “They’ve been unable to do that because of the market and just their personal finances. They would love to live close to us and we would love for them to live close to us as well.”
Just a few months previous to the telephone name to the radio present, some land got here accessible near them, Debbie stated. She and her husband bought the acreage.
“Our home was paid for, but we used an old HELOC (home equity line of credit) that we had there to purchase the land because we didn’t have enough cash to buy it outright,” Debbie defined. “So since then, the rates on the HELOC have more than doubled, which means our payment has more than doubled.”
They all would nonetheless love to have the ability to construct on the land and for the children to reside there, however nobody is at present financially in a position to, she stated.
“So my question is, do we refinance this because the land is paid for but now we’re back in the mortgage situation?” Debbie requested. “Do we roll it into a fixed rate mortgage and just work on paying it off or do we sell it?”
Ramsey requested a pair fast questions and discovered the land was price about $200,000 and the HELOC was for $250,000.
Debbie defined that she and her husband have a handyman service they usually used the additional $50,000 to interchange a truck that not labored.
“You bought a $50,000 truck that you couldn’t afford and you bought a $200,000 piece of ground you couldn’t afford,” Ramsey surmised. “By definition that means you couldn’t afford it if you didn’t have the money to pay for it. Your business is not making enough money to justify a fifty thousand dollar truck. I know that because you didn’t have fifty thousand dollars.”
“You need to sell the land,” Ramsey bluntly stated. “If you’re sitting on three or four million dollars and you wanted to play this out then I would just question whether you’re being an enabler for kids that aren’t handling money well. But we don’t even need to get to that because none of the three of you have the money to do this deal.”
“You shouldn’t have called here if you didn’t want the truth,” Ramsey stated.
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Source: www.thestreet.com”