Financial expert Dave Ramsey cautioned that rushing into homeownership without financial stability can turn a dream into a burden, warning that a house bought too soon can "snap your neck like a twig."
Ramsey Calls Co-Signing ‘Straight Up Dumb’ And Cites Bible Warning
On The Ramsey Show on Wednesday, Ramsey blasted the idea of using co-signers or stretching beyond one's means to buy a home.
"Buying a home is not a blessing when you're broke," he said. "They don't go buy a half-million-dollar house with a co-signer. Let me tell you, if you have to borrow money to do this stuff, you shouldn't be doing it."
Ramsey emphasized that banks rarely turn away borrowers unless they are financially unqualified, adding, "The bank loves to loan money more than anything else. If they won't loan you money, it's because you don't need to be borrowing."
Citing Proverbs 17:18, he declared co-signing "straight up dumb," noting that some translations bluntly say it means you are "stupid."
Ramsey Says Buying A House Too Soon Turns Blessing Into Burden
The radio host warned that a home purchased without financial readiness could become a financial trap.
He stressed that buyers should wait until they are debt-free, have an emergency fund in place, and can afford a 15-year fixed-rate mortgage where payments are no more than 25% of take-home pay.
Ramsey Warns Against Co-Signing, Family Bailouts And Risky Home Buys
Earlier this month, he warned a 30-year-old caller, Karina, against buying a home with her parents, saying the move could trap her in financial dependence as they had no retirement savings.
She also considered gifting her father money for retirement, which Ramsey discouraged.
On a July episode, a caller described a plan for her husband's grandmother to buy a home in their names to shield it from the IRS due to her mother-in-law's $1 million debt.
Ramsey rejected the idea outright, calling it "deception" and urging Sarah's mother-in-law to take responsibility instead of hiding behind family.
Ramsey's broader message: co-signing loans, bailing out relatives, and mixing finances in unstable relationships are "illogical money mistakes" that can wreck financial futures.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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