Dave Ramsey warns Americans on mortgage rates, real estate facts | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

As mortgage rates reached another low Feb. 19, homebuying affordability improved yet again. And this is good news not only for people looking to buy a home, but also for those who already own a home.

“The 30-year fixed-rate mortgage (FRM) averaged 6.01% as of February 19, 2026, down from last week when it averaged 6.09%,” Freddie Mac reported. “A year ago at this time, the 30-year FRM averaged 6.85%.”

“This lower rate environment is not only improving affordability for prospective homebuyers, it’s also strengthening the financial position of homeowners,” the government-sponsored enterprise added.

“Over the past year, refinance application activity has more than doubled, enabling many recent buyers to reduce their annual mortgage payments by thousands of dollars.”

Bestselling personal finance author Dave Ramsey, however, focuses more on the 15-year fixed-rate mortgage when he advises his followers.

As of Feb. 19, “the 15-year fixed-rate mortgage averaged 5.35%, down from last week when it averaged 5.44%,” according to Freddie Mac. “A year ago at this time, the 15-year FRM averaged 6.04%.”

Cheaper 30-year and 15-year fixed-rate mortgages are great news for both homebuyers and homeowners.

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Dave Ramsey urges homebuyers to use 15-year mortgages

Ramsey recommends that people looking to buy a first home view a 15-year fixed-rate conventional loan as the best option.

“Though the monthly payments are higher than 30-year loans, you’ll pay off your mortgage in half the time,” Ramsey wrote. “Plus, most 15-year loans have a lower interest rate, and that interest rate will be locked in for the life of the loan.”

Ramsey also suggests that potential homebuyers get preapproved before looking to buy a house.

“It pays to get preapproved for a loan (not just prequalified),” he wrote. “Preapproval is when your lender verifies your financial information and gives you a letter saying how much money you can borrow. It shows sellers you’re serious and can give you a leg up in a competitive market.”

“Just know some lenders may preapprove you for a bigger loan than you actually need or can afford, so it’ll be super important to keep that 25% rule (that monthly housing costs should be 25% or less of one’s monthly take-home pay) in mind when deciding how much to borrow.”

Ramsey warns homebuyers about bad mortgage products

Homebuyers have plenty of options when it comes to financing a home purchase, and it can be difficult to know which choice is best.

Ramsey’s preferred method is to buy a home with cash. It may sound surprising, but many people do it every day, according to Ramsey.

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“If that’s not feasible for you, the next best thing is a smart home mortgage loan,” Ramsey wrote. “It may be easy to dive headfirst into the mortgage option that will allow you to buy a home with next to nothing down.”

“But a bad mortgage product can be a liability in your financial portfolio,” he continued. “A home should be a blessing to your family, not a financial nightmare.”

Zillow outlines homebuyer affordability

Lenders evaluate affordability using gross monthly income, meaning the amount earned before taxes or other deductions, according to real estate technology company Zillow.
When co‑borrowing, they combine all borrowers’ salaries — for example, a combined $100,000 salary equals about $8,333 in gross monthly income.
A common guideline is to keep total monthly housing costs (mortgage, taxes, insurance) at no more than 30% of gross monthly income.
Based on that rule, a household earning $90,000 a year (about $7,500 per month) might afford a home around $246,000, assuming typical taxes, insurance, and PMI.
With higher income, affordability rises: A $200,000 salary (about $16,666 per month) supports a home near $631,000 under the same assumptions.
At the upper end, a combined $500,000 salary (about $41,666 per month) could qualify for a home around $1.7 million, depending on down payment and local costs. Source: Zillow

Ramsey emphasizes needs vs. wants for homebuyers

It’s easy to imagine that your first house will be the one you stay in forever, but that’s rarely how life works, Ramsey stated.

There’s no need to chase perfection on day one — a person can always move up when their circumstances change.

“Sit down and list out the three to five things your house absolutely must have, focusing on the true nonnegotiables,” Ramsey wrote. “For example, maybe you need to live close enough to commute to work every day, or maybe your pets need a fence.”

“Then, write down a few ‘wants’ that could be the cherry on top of your first home. A swimming pool? Granite countertops? Enough bedrooms so your kids don’t have to share? It’s up to you!”