Dave Ramsey Mortgage Review: Interest Rates, Plans, Calculator

You will learn how to pay your mortgage faster using the numerous Dave Ramsey mortgage calculator.

As we progress in this article, you will understand what I mean by the numerous Dave Ramsey mortgage calculators.

With this mortgage calculator, you will change the interest rate, down payment, and home price, to estimate your monthly payment.

All these are discussed in detail below.

What Are the Plans in Dave Ramsey Mortgage?
Terms That Will Help You Understand the Dave Ramsey Mortgage Calculator
What Are the Uses of a Mortgage Calculator
What are the Dave Ramsey Calculators?
Dave Ramsey Mortgage Advice
How much money should I set aside for a down payment?
FAQs on Dave Ramsey Mortgage Review 2023: Interest Rates, Plans, Calculator
Conclusion
References

What Are the Plans in Dave Ramsey Mortgage?

These are the mortgage plans from Dave Mortgage.

15-Year Fixed-Rate Mortgage

A 15-year fixed-rate loan is a mortgage intended to be repaid over 15 years.

The interest rate will not change for the duration of the loan.

A 15-year mortgage has a high monthly payment but a lower interest rate. This is in comparison with a 30-year mortgage.

If you make a larger principal payment each month, you will build equity in your home faster, pay off your debt faster, and save thousands of dollars in interest payments.

30-Year Fixed-Rate Mortgage

This loan has a repayment term of 30 years. The interest rate will not change for the duration of the loan.

Although a 30-year mortgage has the highest interest rate, it also has the lowest monthly payment. As a result, you will pay a lot more over the loan life.

If you aren’t paying cash for your home, opt for a 15-year mortgage unless you enjoy paying thousands of dollars more than necessary and being in debt for twice as long as needed.

5/1 Adjustable-Rate Mortgage (ARM)

A 5/1 Adjustable-Rate Mortgage (ARM) mortgage is designed to be repaid over 30 years. The interest rate is fixed for the first five years of the loan. However, it will change annually to market trends until the loan is repaid.

Although ARMs pass on the risk of rising interest rates to the homeowner, the rates are typically comparable to those of a 30-year mortgage.

Terms That Will Help You Understand the Dave Ramsey Mortgage Calculator

Interest Rate

The fees associated with financing a home purchase are subject to inflation. This is usually expressed as an annual percentage of the outstanding loan.

For example, a $200,000 mortgage balance with a 5% interest rate would result in an $833 monthly payment increase.

As the balance is paid off in regular installments, the interest on your payment decreases.

Private Mortgage Insurance (PMI)

Private mortgage insurance (PMI) is calculated annually as a percentage of your initial mortgage balance based on your credit score and down payment.

PMI typically costs 0.5% of your monthly loan and protects the lender if you default on your mortgage.

The additional expense does not contribute to the repayment of your mortgage. You can avoid PMI if you have 20% down on your home.

Homeowner’s Insurance

A standard requirement for any home mortgage is residence/home insurance. The premium is typically paid each month along with the mortgage. The cost and coverage vary according to the state and the home’s value.

We advise you to seek professional advice to ensure you have adequate coverage.

Homeowner’s insurance may cover the cost of rebuilding or repairing a home that a fire, windstorm, hail, lightning, theft, or vandalism has damaged.

It can also protect your personal belongings, such as clothing, furniture, and electronics.

Homeowner’s Association (HOA) Fees

HOA are fees charged by homeowner associations to join them.

The homeowner’s association is a group that upholds and enforces the rules for the properties under its control. Homeowners who purchase homes in such a community agree to the HOA’s rules and fees.

HOAs continue to have significant legal authority over property owners regarding the exterior appearance of a home.

Monthly Payment

In a nutshell, monthly payments are payments for HOA dues, homeowner’s insurance and mortgage are made monthly. This payment should be at most 25% of your monthly take-home pay.

Property Taxes

Taxes are levied based on how much the government considers your property worth. The monthly mortgage payment typically covers these.

Property taxes can vary greatly depending on the location and cost of the home.

What Are the Uses of a Mortgage Calculator

Using an online mortgage calculator, you can easily get an accurate prediction of your monthly mortgage payment when you enter the required information. You can also see how much interest you’ll pay over the life of your loan.

1 Understand Your Mortgage Payment

Using a mortgage calculator’s payment breakdown, you can see exactly where your anticipated payment will go, which includes principal and interest (P&I), homeowner’s insurance, property taxes, and private mortgage insurance (PMI).

2 Compare various mortgage products.

Not sure which mortgage is right for you? Use Dave Ramsey’s mortgage calculator to compare 15-year and 30-year mortgage interest rates and estimate the cost of various loan types.

You might be surprised at how much interest you can save by taking out a 15-year fixed-rate mortgage.

3 Calculate the Down Payment

Are you thinking about making a home offer? Adjust the home price in the loan calculator to see if paying more or less than the asking price still fits within your budget.

To determine the impact of increasing your down payment, use the Dave Ramsey mortgage payment estimator. A larger down payment may also qualify you for a lower interest rate. This is in addition to lowering the amount you borrow and monthly payments.

Sometimes, making a down payment of at least 20% of the home’s purchase price may allow you to avoid paying private mortgage insurance (PMI).

What are the Dave Ramsey Calculators?

Using these 13 Dave Ramsey calculators, you can create plans for a mortgage, debt repayment, college savings, retirement planning, and more.

1 Dave Ramsey Mortgage Calculator

Are you buying a house? You can use the mortgage calculator to get a breakdown of your monthly payments and a full payment schedule by entering your purchase price, interest rate, down payment, taxes, and other information.

2 Dave Ramsey Mortgage Payoff Calculator

Use Dave’s mortgage payoff calculator to see how quickly you can pay off your mortgage!

Enter your mortgage loan information and the extra amount you want to pay toward the principal balance.

3 Dave Ramsey’s Cost Of Living Calculator

To get a cost of living comparison, enter the two cities you want to compare with your current salary into the cost of living calculator. You can see how your monthly costs would differ depending on where you live.

Even though the expense categories are automatically filled based on average spending, you can enter your actual expenses for a more accurate comparison.

4 Dave Ramsey’s Retirement Calculator

Dave’s Ramsey IQ retirement calculator allows you to enter your retirement goals and financial situation. The calculator will then use sophisticated math to calculate the nest egg size you’ll need. It will also tell you the amount of money you need to spend each month to make your dreams a reality.

5 Dave Ramsey’s Investment Calculator

By entering your current retirement savings, contributions, and expected annual return rate into the investment /401k calculator, you can estimate the amount of money you will have in retirement.

6 Dave Ramsey Net Worth Calculator

Your net worth is determined by what you own (your assets), minus what you owe (your liabilities). It is a broad indicator of your wealth. You can quickly calculate your net worth when you enter your assets and liabilities into the online form and click the “calculate net worth” button that you can find at the bottom of your computer screen.

7 Dave Ramsey Term Life Insurance Calculator

Describe your situation in detail, including your marital status, dependents, income, debts, and any retirement funds you may have.

The program will then recommend how much insurance you should get (generally 10-12 times your annual income) and how long you should keep it (the term).

Use the calculator here.

8 Dave Ramsey’s College Savings Calculator

Do you want to graduate debt-free? Using the college savings calculator, you can calculate how much money you’ll need for college and devise a plan for paying for it.

9 Dave Ramsey’s Student Loan Payoff Calculator

Don’t make student loan payments for the next 20 years. Use Dave’s student loan payoff calculator to determine how much interest you can save by making extra payments.

Enter your student loan information, and the calculator will help you devise a plan to pay off your debt as quickly as possible.

10 Dave Ramsey Car Payment Calculator

If you’re considering buying a car while carrying debt, use the car payment calculator to figure out your monthly payment.

11 Dave Ramsey’s Debt Snowball Calculator

This debt snowball calculator is useful because it calculates your expected debt-free date.

Using the debt calculator, you can see how quickly you can get there. To begin, enter your numbers.

12 Dave Ramsey’s Debt-To-Income Ratio Calculator

Your debt-to-income ratio is how much your monthly income is dedicated to debt repayment. It takes into account your rent, other recurring payments, and debt. To find out where you stand, use Dave’s debt-to-income ratio calculator.

13 Dave Ramsey’s How Much House Can I Afford? Calculator

Enter your monthly income into the How Much House Can I Afford? Calculator to receive an instant list of home prices that fit your budget according to Dave’s guidelines, giving you confidence in purchasing a home you can afford.

Dave Ramsey Mortgage Advice

Remember that Dave recommends deferring home purchases until you can confirm that you meet the following criteria:

You have no debt
A 3-6 month emergency fund
Enough savings for a 10-20% down payment.
You are qualified for a 15-year fixed-rate conventional mortgage.

How much money should I set aside for a down payment?

Set aside at least 20% of the purchase price as a down payment to avoid paying private mortgage insurance (PMI). PMI is an added expense to your monthly payment that is not used to pay down your mortgage.

If you are a first-time home buyer, a smaller down payment of 5-10% is acceptable, but you will still be required to pay PMI. Make sure your monthly payment on a 15-year fixed-rate mortgage is at most 25% of your monthly gross income.

Also, stay away from VA and FHA loans!

Saving for a large down payment takes time and effort, but the effort is worthwhile. Here’s why; You will have equity when you move into your home.

FAQs on Dave Ramsey Mortgage Review 2023: Interest Rates, Plans, Calculator

Which mortgage is right for you?

Given the variety of mortgage options available, determining how each would affect you, in the long run can be difficult.
These are the most common types of mortgage loans:
Adjustable-Rate Mortgage (ARM)
Federal Housing Administration (FHA) Loan
Department of Veterans Affairs (VA) Loan
Fixed-Rate Conventional Loan
We recommend a conventional loan with a fixed rate for 15 years.

Why not apply for a 30-year loan?

Because the interest on a 30-year mortgage will cost you thousands of dollars more, this could mean a difference of more than $100,000 for a $250,000 loan.
A 15-year loan has a higher monthly payment; you may need to adjust your home-buying budget to get your mortgage payment down to 25% or less of your monthly income.
The good news is that a 15-year mortgage can be paid off in that time frame. Why would you stay in debt for thirty years when you can pay off your mortgage in half the time and avoid paying six figures in interest? That is a no-lose situation!

What is Dave Ramsey Mortgage Calculator Rate of Interest?

The ongoing cost of purchasing a home is commonly expressed as an annual percentage of the outstanding loan.
For example, a 5% interest rate on a $200,000 mortgage balance adds $833 to the monthly payment.
The interest portion of your payment is reduced as the balance is paid down through monthly payments.

Conclusion

When people pile on a mortgage on top of all their debt, unforeseen expenses or a loss of employment can easily send them into a financial tailspin.

Please let us know how these Dave Ramsey calculators helped you achieve debt freedom if you use them.