Dave Ramsey says: Choose shorter home mortgage to avoid debt

Dear Dave,

My husband and I have been saving, and we’re ready to buy our first home. We found a place we both love and can afford if we do a 30-year mortgage instead of a 15-year mortgage. Should we wait and save more for a down payment so we can afford a 15-year mortgage, or go ahead and do the 30-year deal?

— Faith

Dear Faith,

Good financial decisions can be defined as things that help you win with money over the long-term. Thirty-year mortgages are a trap. They don’t help you build wealth, and they keep you in debt. On the other hand, 15-year mortgages get you out of debt a lot faster, and being out of debt frees up your largest wealth-building tool — your income.

I would never take out a home loan where the payments are more than a fourth of your monthly take-home pay on a 15-year, fixed-rate mortgage. My advice is to either wait and save more money, or maybe look for a less expensive home in a different area.

I know you want a home, Faith. There’s nothing wrong with wanting your own house. But I don’t want your home to have you. When you get house fever, it’s easy to lock yourself into a bad deal that will follow you around and drain your wallet for decades!

— Dave

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