You've probably heard the voice. It's loud, it’s Southern, and it’s usually telling someone they’re being "stupid" for financing a car. When it comes to real estate, the advice doesn't get any quieter. Dave Ramsey has some of the most rigid, black-and-white rules in the world for buying a house. Some people think he’s a genius; others think he’s living in 1994.
But honestly? If you’re looking at Dave Ramsey tips for buying a home in today's market, you have to understand the "why" behind the "what." He isn't trying to help you get the biggest house. He’s trying to make sure the house doesn't eat your life.
The 25% Rule Is a Brutal Reality Check
Most lenders will let you borrow until your eyes bleed. They use "gross income"—that big number at the top of your offer letter before the government takes its cut. Dave doesn't care about that number. He looks at your take-home pay.
The rule is simple: Your mortgage payment—including principal, interest, taxes, insurance, and those annoying HOA fees—cannot exceed 25% of your monthly take-home pay.
Wait. Just 25%?
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In 2026, with home prices still sitting at record highs, that feels impossible for a lot of people. If you bring home $5,000 a month, Dave says your housing cost should be $1,250. Good luck finding that in Austin or Nashville, right? But here’s the nuance: he’d rather you rent a small apartment for five more years than buy a house that leaves you "house poor." Being house rich and life poor means you have a beautiful kitchen but you’re eating ramen on the floor because you can’t afford a table.
Why 25%?
- Safety Margin: It leaves room for when the water heater explodes or the roof starts leaking.
- Retirement: You can still invest 15% into your 401(k) or IRA.
- Life: You can actually afford to go on vacation or buy a pair of shoes without checking your bank balance first.
The 15-Year Fixed-Rate Obsession
This is where people usually start yelling at their radio. Dave Ramsey is adamant—and I mean adamant—that you should only ever get a 15-year fixed-rate conventional mortgage.
He hates the 30-year loan. Why? Because of the math. On a $300,000 loan at 6%, a 30-year mortgage will cost you roughly $347,000 in interest alone. A 15-year mortgage? About $155,000. You're literally handing the bank an extra $192,000 just for the "convenience" of a lower monthly payment.
Sure, the 15-year payment is higher. It’s a lot higher. But you own the house in half the time. Most people spend 30 years paying for a house they’ll eventually sell anyway. Dave wants you to actually own the dirt.
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Financial Prerequisites (The "Are You Ready?" Test)
You shouldn't even look at Zillow until you’ve checked three specific boxes. This isn't just "good advice"—it's the core of the Ramsey philosophy.
- Debt-Free: Every credit card, car loan, and student loan must be gone. Zero.
- Emergency Fund: You need 3 to 6 months of expenses sitting in a high-yield savings account. This is NOT your down payment.
- Down Payment: Ideally, you want 20% down. This gets you out of Private Mortgage Insurance (PMI).
PMI is basically you paying for insurance that protects the bank if you fail. It does nothing for you. It’s a "I’m broke" fee. If you’re a first-time buyer, Dave says 5-10% is "okay," but he’s going to nag you about it.
The "Date the Rate" Myth
You've probably heard real estate agents say, "Buy now, refinance later! Date the rate, marry the house!"
Dave thinks this is dangerous. Why? Because there’s no guarantee rates will drop significantly in the next year or two. If you buy a house you can't afford on a 30-year loan, hoping to refi into a 15-year later, you’re gambling with your family’s shelter. Only buy if the numbers work today. If they don't work at 6.5%, they don't work.
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Avoid the "Gimmick" Loans
Stay away from FHA, VA, and USDA loans if you can. I know, I know—they let you put 0% or 3.5% down. It sounds like a dream.
But these loans often come with higher fees and "mortgage insurance premiums" that stick around for the life of the loan. You end up paying way more over time. A conventional loan is cleaner. It’s boring. And boring is usually better when it involves hundreds of thousands of dollars.
What to do if You're Priced Out
Honestly, 2026 is a tough year for buyers. If you can't find anything that fits the 25% rule on a 15-year fix, you have three options according to the Ramsey playbook:
- Move: Look further out from the city center.
- Wait: Keep renting and pile up a massive down payment so the loan amount is smaller.
- Earn: Get a side hustle or a promotion to raise that "take-home pay" number.
It’s not fun. It’s definitely not "instant gratification." But the goal is to have a house that feels like a blessing, not a curse.
Next Steps for Your Home Search:
- Calculate your max payment: Take your monthly take-home pay and multiply it by 0.25. That is your hard ceiling.
- Audit your debt: If you still have a car payment, pause the house hunt. Kill the debt first to free up your cash flow.
- Get a 15-year quote: Talk to a lender specifically about a 15-year fixed rate to see how it affects your buying power compared to the 30-year.
- Interview agents: Look for "Endorsed Local Providers" or agents who understand the "debt-free" mindset so they don't pressure you to overspend.