Real Estate Quiz

9 Minute Read

How much do you know about Dave and wise real estate decisions? Take the short quiz below to find out how much you know. And don't worry, we’ll explain the correct answers to you after you take the quiz. Good luck!
1. How does Dave recommend people purchase their home?
 
By taking out a mortgage
 
By paying cash for a home
 
Don’t buy a home. Dave thinks you should move in with the in-laws!
Detailed Answer: Dave’s first recommendation is to pay cash for your home. If you decide to take on a mortgage, Dave recommends no more than a 15 year fixed-rate mortgage with 10, preferably 20, percent down.
2. Is it really possible to pay cash for a home?
 
No
 
Yes!
Detailed Answer: It’s absolutely possible! However, it will take hard work, sacrifice, and time. Ask any eighty-year-old if a few years of sacrifice is worth it to change your financial destiny for the rest of your life. Paying cash for a home is possible, very possible. What’s hard to find is people willing to pay the price in sacrificed lifestyle.
3. If you choose to get a mortgage, how long of a mortgage does Dave recommend?
 
30 year mortgage
 
15 year mortgage or less
 
Wait, you mean there’s a loan that Dave doesn’t yell about?!?
Detailed Answer: Dave tells everyone never to take more than a 15 year fixed-rate loan. Remember; never have a house payment over 25% of your take-home pay.
4. What is a reasonable monthly payment for a home?
 
One-fourth (25%) of your take-home pay
 
Half (50%) of your take-home pay
 
However much it takes to impress your friends and family with your big home
Detailed Answer: Banks will let you qualify for loans that are 50 to 100 percent more than you can afford. We have discovered over the years of financial counseling that one-fourth (25%) of your take-home pay is a good standard to follow when purchasing a home. Never have a payment of over 25% of your take-home pay. That is the most you should ever borrow.
5. It is a good idea to take out a thirty-year mortgage and promise yourself to pay it like a fifteen-year, so if something goes wrong you have wiggle room.
 
True
 
False
Detailed Answer: When you get a 30 year mortgage, something will go wrong and you’ll rationalize not making that extra payment. Sick kids, bad transmissions, prom dresses will come up and you say, “Oh, I’ll pay extra next month.” The FDIC says that 97.3% of people don’t systematically pay extra on their mortgage. You need to put systems into place that make you do smart things; a 15 year mortgage is one of those systems. 15 year mortgages always pay off in 15 years and save you thousands of dollars. Use our mortgage calculator and find out how much you can save!
6. How much should you borrow on your home to invest in mutual funds?
 
Borrow all you can, baby!
 
No more than 25% of your home’s worth
 
Never borrow on your home to invest!
Detailed Answer: In the end, when the smoke clears, you really don’t make anything. People who spread the myth that you should borrow on your home to invest are very naïve in how they approach investing. After taxes and fees you’ll be lucky if you come out ahead with just a few hundred dollars. And don’t forget about the risk. If the market takes a turn for the worse, which does happen, you’ve just added to your debt!
7. Is it wise to keep a home mortgage to get the tax deduction?
 
Absolutely!
 
Absolutely not!
Detailed Answer: Tax deductions are no bargain. You have to payout far more than you will ever get back from Uncle Sam. Don’t believe the myth.
8. By cosigning a loan for a new home or apartment, you are helping a friend or relative.
 
True
 
False
Detailed Answer: Be ready to repay the loan; the bank wanted a cosigner for a reason.
9. Does Dave recommend selling your home yourself (for sale by owner) to save money?
 
Yes
 
No
Detailed Answer: If anyone is an advocate of avoiding unnecessary expenses, it’s Dave Ramsey. But this is your home, possibly your largest asset. A relatively small mistake or oversight in the home selling process will cost you much more money, time and frustration. When it comes to selling a home – or even buying a home – choose a professional, one that really knows how to serve you all the way through the process.
10. According to Dave, who should you trust to sell your home?
 
A friend or family member who successfully sold their own house
 
A veteran real estate agent that really knows how to serve you and sell your home
 
A rookie real estate agent because they charge the least
Detailed Answer: Even though Dave spent most of his early career in real estate, he wouldn’t think of risking the sale of his home without an expert real estate agent. In fact, a study by the National Association of Realtors shows homeowners using agents sell their home, on average, for 16% more than homes sold “For Sale By Owner.” Find the local real estate agents Dave trusts!
 
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