Owning A Home: The Most Misunderstood American Dream #2

Now that we’ve stated our purpose , let’s get started.

You’ve seen how many mortgage options a home buyer has these days.  If the banks made the same amount of money on every mortgage loan then truly how many options would we have as borrowers?


But we don’t have just one.  There are several to choose from.

That then begs the question, do the banks have our best interests at heart? I believe most of you reading would say no.  More like, HECK NO!

So, if they don’t have our best interests at heart and they offer us so many different options that provide various profit margins for them then maybe, just maybe, we should do a little math.  But how many of you have done so?  More importantly, how many of you have financial professionals who have done so in your life?

If you think it’s only about the amount of interest you pay (i.e. Ramsey) you are hugely mistaken. Check out his own words on his website and read the “Want More Proof?” piece.

Our guess is when you chose your mortgage you simply took the product that:

  1. provided you the lowest rate,
  2. provided the payment structure that satisfied your budget,and 
  3. satisfied your plan to pay the house off early.

If you followed Dave Ramsey’s advice then you took the 15-year mortgage.  Unfortunately, you chose the one mortgage that makes the most money for the bank of all options available to you.  Hey, at least your bank has profited from your choice…heck you might have even scored a toaster.

What if you missed a crucial piece to this plan?  Would you want to know about it? You’re reading this so you’re at least interested or you’re secretly hoping that I make myself look like a fool.  I mean really, can I back up the statement that 15-Year mortgages are a dream to the banker?  Yep, and I will.

We educate on what we call financial transfers.  This is money that you’re losing unknowingly and unnecessarily and the largest transfer of wealth, next to taxes, anyone will ever encounter is the purchasing of a home and the mortgage associated with that transaction.  It is part of the traditional American dream. It’s also the most misunderstood.

As promised, let’s take a quick quiz to see how you’ve understood mortgages so far.  Ready?  Go with your first reaction.


  1. A large down payment will save you more money on your mortgage over time than a small down payment.
  2. A 15-year mortgage will save more money over time than a 30-year mortgage.
  3. Making extra principal payments saves you money.
  4. The interest rate is the main factor in determining the cost of a mortgage.
  5. You are more secure having your home paid off than financed 100%.

Imagine if math, not some theory or new “latest and greatest” product, but math proves that each of these statements are actually false.  Would you think it was worth your time to learn just how that’s the case?  It’s certainly worth it from a financial standpoint.

If you’re a Dave Ramsey follower then you certainly answered “True” for each one of the above statements.  Soon you will understand why I have such a hard time with what he teaches and specifically that churches continue to hold his classes.  My fellow Christians need to know the truth.

I will say this though about Ramsey: what he teaches about snowballing debt and creating a savings cushion is right on the money and very much needed in today’s “spend now and pay later” culture.  I just wish he stopped there.  It’s his instruction on mortgages and investments that are incredibly off the mark and unfortunately it’s these two topics where people lose the most money.

Stay with us, we’re about to dig in the heels…remember the Bigger Box?

Kelly O’Connor – kelly.oconnor@mtnfinancial.com


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6 Responses to Owning A Home: The Most Misunderstood American Dream #2

  1. Bill Flek says:

    I just read an article about Dave Ramsey’s fancy pad in Franklin, Tennessee. What a home!

  2. bethebank says:

    It is fancy. I created this quick video for a guy I know about Ramsey’s recent purchase and his financial advice…basically taking a look at his faulty math.

    Here it is: http://www.screencast.com/t/BRsxcC6Tz

  3. fubeca12 says:

    You don’t “welcome” feedback you moderate it. Your issue with Dave Ramsey (whose books I have not read, classes I have not taken etc…) is that your model of financial planning requires you to get people to think they are banking on themselves when in actuality it’s just another banking type sale from your product pouch.

    • bethebank says:

      Really? That’s interesting. Curious what that product is from my “pouch”? This comment from you only shows the problem with traditional thinking today. The financial world is like a bunch of golf club salesmen. They all claim their product is best and they continue to push you towards their club; unfortunately, your swing sucks. Let’s pretend you could compete in The Masters golf tourney and had a choice between selecting the golf clubs of any player to have ever played or their ability, which would you choose? Their ability of course. The swing is FAR more important than the club.

      Our financial strategies as citizens of this great country are marketed in this same manner…the focus is constantly on “the club”. I’ve never even mentioned a product yet you put me in that box. The reason it’s “so illusive” is because it’s irrelevant. You must learn to eliminate transfers of your wealth first and then the products define themselves. The three largest transfers for most people (certainly the “financial idiots” who follow Ramsey) are taxes, how they fund their qualified plans, and how they pay their mortgage. Nothing fancy, just math.

  4. fubeca12 says:

    So if I free my mind from transferring wealth the “products” appear? But it still is a product which is likely to be some form of a Bank on Yourself Whole Life Policy.

    Which is fine but playing the “free your mind”, icon bashing (Ramsey is your whipping boy) and no mention of where it’s all leading is just a sales tactic and for what it’s worth a similar technique used by cults lol.

    • bethebank says:

      Once again fubeca12, you’re welcome to provide something of value in attempt to show my math wrong but your subjective rhetoric does nothing and I won’t approve those comments from you anymore.

      You don’t have to “free your mind” like some great drug or “cult” as you say, you just have to educate yourself. Malcolm Forbes says it best, “The dumbest people I know are those who know it all.”

      As far as bashing Ramsey, I’m honored to do so because what he teaches is utter nonsense and ironically makes the most amount of money for banks, Wall Street, and insurance companies…that’s not my subjective opinion that’s objective, mathematical truth. I want him out of my church. He’s a false teacher who’s leading people astray and I will always stand against individuals and companies who do such a thing.

      So, you’re welcome to challenge me in a constructive way.

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