Dave Ramsey Says This Common Mortgage Mistake Is Financially ‘Stupid’

“Your house payment is 50% of your take-home pay,” Ramsey said. “It already was in the stupid zone as soon as you moved in.”

Katie noted that they bought the home to move out of her parents’ basement and so that her husband could be closer to work — but Ramsey doesn’t think they were financially ready for such a big move.

“You went from homeless in your mother’s basement to $4,000 a month,” he said. “This is not a small step — this was a great leap.”

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Ramsey’s Advice: Sell the House

Ramsey’s recommendation was clear: Sell the house. He emphasized that the family was living in a home they simply couldn’t afford.

“The house payment needs to be more like a fourth of your take-home pay — not half,” he said. “Especially when you have eight little birds to feed.”

Finding a Reasonable Alternative

Katie said that she was willing to sell her house and move into a trailer, but Ramsey said that it’s not necessary to go to such extremes.

“Why don’t you just go do something reasonable, like [pay] $2,000 a month [for housing] and live out far enough away that you can find that?” Ramsey said. “Let’s get rid of this problem.”