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Chapter 1: What is the main topic discussed in this episode?
Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studios. It's the Ramsey Show, where we help people build wealth, do work. that they love, and create actual amazing relationships. George Campbell, Ramsey Personality, co-host of the uber-popular Smart Money Happy Hour that he and Rachel Cruz do as a podcast on the Ramsey Networks.
He's my co-host today. Open phones here as we talk about you right in front of you. It's your life, baby. Let's talk about it. The phone number is 888-825-5225. That's 888-825-5225. Anthony's starting off this hour in San Francisco. Hey, Anthony, what's up? Hey, Dave, how are you? Better than I deserve. How can I help?
Yeah, well, first of all, happy early Father's Day. And my wife, well, I started listening to you about a year and a half ago, and I got my wife, recently new wife, into you as well. So we're both on the same plan and have the same head on. And my question is, we want to purchase a house within the next year or two.
And the only debt we have right now is student debt that we've been saving over the last year. And my question is whether... We should pay it off all now, but wondering if that will affect our credit score with trying to purchase a home within the next year. George, you did this.
Yeah. Living this out, I've paid off student loans, and I bought a house without a credit score. So the question I think you're asking is how will it affect it in the meantime if I'm in that weird in-between? Because when you pay off your student loans, is that all of your debt?
Yes, that's all our debt.
Before he goes on, let me ask you a question. Do you have enough money in the bank right now to pay off the student loan?
We do. We both do. Okay.
So you can just write a check and be done today. And then you want to buy a house about a year from now. Correct. Okay. Making sure I have my facts right. Okay.
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Chapter 2: How can paying off student loans affect my credit score?
Close them too. That'll keep your credit score open. What we're trying to do is have zero credit activity, which will make your credit score completely disappear in six to nine months. Zero credit score sets you up for manual underwriting. which is where they just check your job, check your deposit like we used to back in the day when people had sense.
Back in the old days.
Back in the day when people had to actually qualify for a mortgage, and a monkey can give you a mortgage now by looking at a number. Credit score. But, yeah, we used to actually make sure people had the money to pay the bill and stuff.
and it's called underwriting the loan manual underwriting is what it's called now as opposed to not underwriting it and so uh that's what george did he went with a zero credit score into churchill mortgage and got a mortgage on his first home did i have that right yeah
And there was Anthony, there's going to be so many friends and family that go, you're crazy. It's going to be so much more expensive. It's going to take forever. It's going to be impossible. Don't listen to them because they've never done it. And so I'm telling you, it's not going to be that difficult. It's not going to take a lot more time. There's going to be a few more extra documents.
And as long as you stick to that 15 year fixed with at least 10% down, you're going to get a really great competitive interest rate.
With Churchill Mortgage. Not all mortgage companies know how to do this, Anthony. Yes. So you can't run over some stupid butt place like Bank of America because they won't know their butt from a hole in the ground.
My lender said they won't do it. You got to stick with one that actually knows what they're doing.
Yeah. You got to get with somebody like Churchill. Because we've endorsed Churchill for almost 30 years and because I've told people to not borrow money. Churchill has obviously system-wide learned to and managed their whole process to being able to do manual underwriting because a lot of Ramsey people don't have a credit score because all of us got rid of our debt and our credit.
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Chapter 3: What are the benefits of manual underwriting for mortgages?
You're getting good advice on the gradual move so as not to bump your tax bracket because whatever you pull out from under the traditional and move it to the Roth is not going to be subject to required minimum, and it's going to grow from this point forward tax-free, but you're moving it gradually so as not to bump up a tax bracket, and that's good advice.
The advice that got you here, however, is bad advice. I wish you were all in Roth right now. You'd be in much better shape. You wouldn't have any of this discussion going on, and you'd probably have more money. But it's not the end of the world. You did good, and you've retired, and you got a chunk of money. So you and I got the opportunity to talk theory, and that's awesome. I love it.
I love it, I love it, I love it. So the rule is, rock, paper, scissors, but except there's only one way to go, okay? Match beats Roth. 100% match before you get started. You can't beat that math, right? Beats Roth. Roth beats traditional. So do all the match you can, all the Roth you can, and only then do you do traditional. This is the Ramsey Show.
George Campbell Ramsey Personality is my co-host today in the lobby of Ramsey Solutions on the debt-free stage. Ruben and Andrea are with us. Hey, guys, how are you? Good. Good. Welcome. Where do you guys live?
English, Indiana.
What's that near?
It's about an hour west of Louisville.
Okay, cool. Yeah, I know right where you are. Yeah, very cool. Welcome to Nashville. Thank you. And how much debt have you guys paid off?
We've paid off $252,852. Way to go.
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Chapter 4: How can I effectively budget my income?
So... I'm just brave. I know. You are. You have great courage.
But this idea that a used car is somehow way more unreliable than your new car.
What's interesting is if you buy a brand new car and you have it for two years, do you have any idea what you're driving? A used car. How is it possible that all used cars are unreliable? That's a dumb but statement.
Chapter 5: How do I balance living expenses and saving for the future?
That's dumb, especially cars as well as they're made today. The quality of vehicles today. I just saw. We have a 200,000-mile Civic, and it's still a great car.
They sent me a video of this Toyota that had 1 million miles on it, and it was still running.
I don't want that.
But it was impressive, this idea that if it's over 100,000 miles.
You could change your oil. Goodness gracious. Change your oil. This is not rocket science. But, I mean, I'm going to die in a fire on the interstate. What kind of wilting snowflake comment is that? Well, it's hyperbolic. I'm going to die in a fire on the interstate. You are a drama freaking queen. They catastrophize everything.
And worse than that, you posted that on a YouTube video that was someone else's. What? Jeez.
I know.
These are the YouTube comments that I love to read, Dave, just to rile you up. I think I can hear your mother's helicopter blades in the background. Eat something safe and reliable. No gluten. I'm just saying. Oh, my gosh. Wow. Oh, what a time to be alive. I'm telling you, man. Jeez. I am turning into that get off my lawn guy.
And we're all here for it.
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