“Our realtor literally laughed at us and then fired us,” said Hope, a recent caller on The Ramsey Show. She is looking for a $350,000 house in Northern Virginia, where that price point barely exists. The realtor’s reaction was rude.
But host Ken Coleman’s said it was also honest. The average home price in that area is much higher. “A $500,000 to $1 million house is going to take a while for you,” he said. “That’s the real real.”
Why $350,000 on $90,000 Is Still a Stretch
The standard affordability guideline says your mortgage payment should stay at or below 28% of gross monthly income. Hope and her husband make $90,000 annually, so should aim to stay below roughly $2,100 per month. Mortgage rates on a 30-year conventional loan are averaging in the 6% range. The couple has saved $25,000 for a downpayment, so their loan would be $325,000. At 6%, that principal and interest payment alone runs roughly $1,948 per month before taxes, insurance, or potential HOA fees. Total housing costs would push well past the maximum target of $2,100.
Coleman suggested the family increase their income before buying a home, pointing out that Hope currently doesn’t work. “Yes, you should go to work,” he said. “Because if you can bring in $50,000, $60,000, and I’m making that up out of thin air, … that changes the game.” A household income of $140,000 to $150,000 puts a $350,000 purchase well within reach and makes a $500,000 home a realistic five-year target rather than a fantasy.
Hope said rent currently consumes 43% of their income, leaving only $250 per month after all expenses. “Even if you weren’t looking to buy today, if you just called and said, ‘Hey, my rent’s 43% of my income,’ I’d go, ‘Oh, you gotta go back to work,'” said co-host Jade Warshaw.
One obstacle is childcare for the couple’s 8-month-old son. Coleman offered a potential solution from his own life: “You have an awesome church community. I’ll bet you, in a short amount of time, we could find a grandmother who’s bored out of her skull, and she wants to get away from her husband for 6, 7 hours a day, and she would love to watch your son and do a little bit of laundry, maybe even some meal prep.”
Coleman said he and his wife used exactly this approach with three children, finding a woman who helped at a fraction of typical daycare costs. Institutional daycare in Northern Virginia can cost up to $2,000 on average per month for an infant. A community-based arrangement at even half that cost could make returning to work financially viable.
A Retirement Pause Worth Considering
Warshaw also recommended pausing retirement contributions. “I would completely cut it off,” she said. “I’d cut that off for up to 2 to 3 years while you save for this down payment.” The couple is currently investing about 7% of income toward retirement. Redirecting that toward a down payment fund accelerates the timeline without permanently derailing long-term savings, provided contributions resume once the house is purchased.
Warshaw offered her own timeline as a reference point. “It took Sam and I 10 years to be able to save up for a house,” she said. “And let me tell you something, to this day I never go, ‘Oh, the one regret in life is that I had bought my house 8 years earlier.'”
Hope’s dream is achievable, the Ramsey Show hosts said. The timeline just needs adjusting, the income needs expanding, and the community needs to be asked for help.
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