Following the Federal Reserve’s recent interest rate cut on 18 September, the U.S. real estate market seems primed for increased activity. As Jeffrey Quiggle reported for TheStreet, with mortgage rates for 30-year fixed loans hovering near 6% and potentially dropping further, experts expect an uptick in home buying and refinancing activity. However, personal finance guru Dave Ramsey has issued a warning against taking unnecessary risks in this changing market.
Ramsey, in his advice published by TheStreet, suggests that refinancing a home could be a smart move for long-term homeowners. By switching from a 30-year mortgage to a 15-year loan, homeowners can pay off their mortgage faster and avoid years of extra interest. However, Ramsey cautions against a more speculative approach that some may be considering—flipping houses to fund a new home purchase.
In a letter shared by TheStreet, Ramsey responded to a man asking whether he should buy and flip a house in a different state to generate extra funds. Ramsey quickly dismissed this idea, pointing out that successful house flipping requires constant oversight. As he told TheStreet, managing such a project remotely would be even more difficult, as professional house-flippers often review numerous properties before finding a good deal.
Ramsey made it clear in his response that house-flipping is already challenging in one’s local area, and attempting it from hundreds of miles away would be even more complicated. Instead, Ramsey advised the reader to continue budgeting, saving aggressively, and even consider taking on extra work to build a down payment fund more reliably.
Ramsey reinforced his long-standing belief in financial patience and discipline, warning that shortcuts like remote property flipping can lead to more headaches than rewards. For those aiming to purchase a home, Ramsey advocates saving steadily and avoiding high-risk strategies.
Featured Image via YouTube