Our Friend Dave Ramsey is at it again.
- Thread starter Trelvis
- Start date
froginaustin
Active Member
12% -- That's what Madoff promised most of his clients. :laugh:
cdsfrog
Active Member
12% is beyond ridiculous to recommend for clients to use. That is very unrealistic. I have a lot of emerging stock, emerging debt, commodities, domestic small/mid cap, corporate debt, GNMAs etc and my forecast is 9.5% high-end, 6% low-end with an average of 8%. For my wife's more conservative account I forecast her return as 6%
+1 I like a lot of what Dave Ramsey (the finance guy) has to say. Somehow people got along without credit cards 50+ years ago.
cdsfrog
Active Member
Some of the things Ramsey talks about make sense. Others don't just like anyone else.
Take the bits and pieces of advice that do make sense and move on.
SnoopFrogs11
Active Member
It seems like he doesn't have much football knowledge or any sports acumen. He will be proved wrong, when that happens I will laugh in his face.
Zebra Frog
KMA
I'm sure that those who follow Dave Ramsey's financial advice, that have had success with it, are happy with his program, and yes, a number of years ago, we did quite well in this country without credit cards.
I can only speak in the present regarding mortgage loans, since that's what I do. In this day and time, very few banks, including the big box banks, hold the note, unlike the mom and pop banks of 30 years ago. And, yes, way back then, you could go to your local bank that you did business with, make a down payment of 20% or more, and buy a house. The only credit decision that was made was how you paid your debts within your community, so to speak.
In this era of everything, pretty much, being credit score driven, from employment prospects on up, if you aren't paying cash, if you don't have credit scores, you don't get approved.
Again, from a mortgage standpoint, let's say you want to buy a house and you have a 50% down payment, but no credit scores, you are almost always declined. There are exceptions, of course, and that is if you have a standing relationship with your local bank, but without credit scores, meaning you have and use credit cards to some extent, you are out of luck.
Credit should be used wisely. If he would just say that and give examples, what he advocates is good information. However, when he says to cut up your credit cards and pay cash for everything, in some instances this is not such good advice. You are better off by paying your credit cards off every month. And if you are thinking about buying a house, have paid off your credit cards, for goodness sake DO NOT CLOSE THE ACCOUNT until after you close on the mortgage loan, especially if you have some cards that aren't paid off. That could drop your credit scores considerably, maybe even to the point you won't qualify.
I can only speak in the present regarding mortgage loans, since that's what I do. In this day and time, very few banks, including the big box banks, hold the note, unlike the mom and pop banks of 30 years ago. And, yes, way back then, you could go to your local bank that you did business with, make a down payment of 20% or more, and buy a house. The only credit decision that was made was how you paid your debts within your community, so to speak.
In this era of everything, pretty much, being credit score driven, from employment prospects on up, if you aren't paying cash, if you don't have credit scores, you don't get approved.
Again, from a mortgage standpoint, let's say you want to buy a house and you have a 50% down payment, but no credit scores, you are almost always declined. There are exceptions, of course, and that is if you have a standing relationship with your local bank, but without credit scores, meaning you have and use credit cards to some extent, you are out of luck.
Credit should be used wisely. If he would just say that and give examples, what he advocates is good information. However, when he says to cut up your credit cards and pay cash for everything, in some instances this is not such good advice. You are better off by paying your credit cards off every month. And if you are thinking about buying a house, have paid off your credit cards, for goodness sake DO NOT CLOSE THE ACCOUNT until after you close on the mortgage loan, especially if you have some cards that aren't paid off. That could drop your credit scores considerably, maybe even to the point you won't qualify.
ShivasFrog
Active Member
I think a lot of Dave Ramsey's advice is aimed at the guy with 8-10 maxed-out credit cards whose credit score is already trashed. Everyone benefits from having a credit card if they know how to handle it.
Dtx_Frog_Fan
Active Member
I got a mortgage in 2008 with about 40% down from Wells Fargo and not having a credit card. Could have been done with 20% down. If you can afford the house i.e. mortgage payment is less than 25% of take home pay with two years of stable job history, and limited or no negatives a good number of places will give the mortgage. Some of the big box banks will focus on your credit score and deny you with limited or no credit, but it is not difficult to find one that will give a mortgage based solely on your ability to afford a mortgage, kind of like how bond ratings are determined on corporate debt. Credit scores have nothing to do with income and assets and are only linked to the extent to which you play the banks' games. Companies only care about negatives on a credit report and that is usually limited to the really big stuff like bankruptcies and foreclosures, but sometimes smaller stuff if they are going to be issued a company credit card.
Zebra Frog
KMA
This is not 2008, it's 2011. There were a lot of crazy things going on in 2008. No down payments with credit scores in the 500's for instance. Sign your name and get a house. That's not happening in today's market. Greedy Wall Street people brought down the financial world in a big way. Everybody is now paying for it. Then Frank/Dodd got involved and screwed the mortgage industry up even more. Have you compared Good Faith Estimates from then and today? And they say today's is easier to understand and more protective of the buyer. Yeah, right!
Did you have credit scores? You can have scores without having credit cards.
Did you have car payments? That will give you credit scores.
Did they do alternative credit? Rent, water bill, electricity bill, phone bill??? Can't do that anymore either.
Some banks, mostly smaller ones, will give you a loan, especially with that down payment. Thanks for confiming exactly what I said in my previous post.
I'm not a financial genius and don't pretend to be. But I've been doing mortgages for 18 years. I know what quidelines are and what it takes to be approved for a mortgage. Decent credit scores (no matter how you get them), income, and money to close with. (unless, of course you are doing a loan on our Professional Program, which is no down payment, no PMI, and the seller can pay ALL closing costs/pre-paids) But, you still have to have credit scores and income that you can document. You can have credit scores of 825, a down payment of 50%, but if you don't have verifiable income, I can't approve you. A small, local bank, maybe. And I don't work for one of the big box banks.
Zebra Frog
KMA
Totally 100% agree with this.
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