I have posted on here for a lil while now. My assistant came to work crying that she saw this clip and she wants to buy a house but Dave Ramsey says to buy it for cash and FICO is stupid and not to go with a mortgage.
I understand her frustration as she is paid $75,000 a year and will never be able to buy a house for cash. She directed me to this video of Mr Ramsey and wanted my opinion. I told her that I am a firm believer in FICO, what it stands for and how it works. Since I am biast I told her that I would post it on here and in some time when there are enough responses that I will print it and give it to her for her to decide.
I think Dave Ramsey is giving bad advice and can ruin peoples lives. But here is the video of him. Please honest opinions. I really want her to buy a house NOW and not in 60 years LOL
Thanks
Mark
When you can write a check and buy the whole apartment complex, you probably don't need a FICO score. However I would be surprised if Dave doesn't have any mortgages for the many real estate properties he owns. Using debt wisely, it becomes just another tool to wealth.
As is commonly said, Dave Ramsey is basically AA for debt-aholics. One you're out of debt it's best to seek the advice of others.
And of course he is quite wrong that you must pay interest to have a high score.
@Anonymous wrote:I have posted on here for a lil while now. My assistant came to work crying that she saw this clip and she wants to buy a house but Dave Ramsey says to buy it for cash and FICO is stupid and not to go with a mortgage.
I haven't watched [and don't intend to] the video, but wanted to say this: I think it's ludicrous to think that most people can just write a check for a house. I have no idea where Ramsey lives or if he's familiar with housing costs in various areas, but he needs a reality check!
Here in California, housing prices are extremely high. In Los Angeles county, even factoring in the crappy areas that includes, the median price for a house is almost $800,000. In my neighborhood, median is somewhere around $2.8M. Yes, houses in my neighborhood routinely sell for cash, but I don't think that's the norm when you're talking about all neighborhoods, and all income brackets, across the country.
I'm guessing that Ramsey is blessed with financial resources that allow paying cash for a house. But when the majority of Americans state that they would be unable to cover a $400 emergency expense--four hundred dollars!!--I think it's pretty unrealistic that they can buy a house for cash.
FICO definitely has its problems, but nothing is perfect. It does a pretty good job of what it's intended to do, and if Ramsey doesn't like it, fine, but he shouldn't misinform/misguide people with biased opinions that are based on his own financial status. Just because he doesn't need to worry about FICO scores and can buy a house with cash doesn't mean everyone can. 
@Remedios wrote:@Anonymous please do not link to that channel.
You're on credit card forum assuring anti-credit fanatic increases views.
If anyone wants in that cult, it's an easy search.
Understood
Thanks
Mark
@CreditInspired wrote:
I'm 69 yo and don't know a single person--relative, friend, coworker--who paid all cash for a house. Over my various careers, I've been a Realtor for 10 years, and again, not one all-cash buyer. Now, I know it happens, but it's not the majority.
So my question, and what I don't understand, is why is she solely invested in one man's theory so much so that she is crying. Why didn't she ask her relatives, her friends, her parents, her coworkers if they purchased their houses using all cash.
Just goes to show what a variety of people we have here! EVERYONE in my family paid cash for their houses--and all other real estate they bought. For example, my grandmother owned rental properties throughout Pasadena, both residential and commercial, in addition to her personal homes, and paid cash for every single one of them. When my husband and I got a mortgage to buy our house, that was a first in my family!
Where I live, it's very, very common for houses to be purchased 'all cash'--and I get unsolicited offers all the time to sell my house. I own it outright; its current valuation varies from $1.7M to $2.5M, depending on various factors--but the one thing I can guarantee is that if I sold it, the entire property would be razed as soon as the new owner took possession. In its place would go a gigantic, ridiculously-oversized-for-the-property McMansion.
The entire street I grew up on is unrecognizable now; the beautiful, sprawling California ranch houses have all been replaced by Gothic columns, dolphin fountains, and other silly things that make my blood boil. Sorry, I'm letting myself get carried away--this is one of my big pet peeves. The house directly across from mine was demolished a few years ago, replaced by a hideously-oversized McMansion.
People pay cash--in the millions--to buy a house, then pay several *more* millions to raze it and have a new house put up in its place. I'm aware that this isn't the norm nationwide, but it is where I live. Since I'm adamant that I'll NEVER sell my house, I can see how 20, 30 years from now, it'll look like a little pea in a sea of grapefruits! (I've stipulated in my trust that my daughter cannot sell it, except under very specific--and VERY unlikely--reasons, such as the neighborhood turning into a slum.)
Easy for Dave to say when he makes $60MM per year selling his "debt and credit is stupid" programs. He equates credit and debt. We all know that the two aren't necessarily the same, though there is the potential for them to be. I started listening to Dave when I was in college. I learned to "eat the meat and spit out the bones" with his extremely radical advice.
Starting Score: 469