.ramsey-home-calculator {
font-family: Arial, sans-serif;
max-width: 700px;
margin: 20px auto;
padding: 20px;
border: 1px solid #ddd;
border-radius: 8px;
background-color: #f9f9f9;
}
.ramsey-home-calculator h2, .ramsey-home-calculator h3, .ramsey-home-calculator h4 {
color: #333;
text-align: center;
margin-bottom: 15px;
}
.ramsey-home-calculator p {
line-height: 1.6;
margin-bottom: 10px;
}
.calculator-inputs label {
display: block;
margin-bottom: 5px;
font-weight: bold;
color: #555;
}
.calculator-inputs input[type="number"] {
width: calc(100% – 22px);
padding: 10px;
margin-bottom: 15px;
border: 1px solid #ccc;
border-radius: 4px;
box-sizing: border-box;
}
.calculator-inputs button {
display: block;
width: 100%;
padding: 12px 20px;
background-color: #007bff;
color: white;
border: none;
border-radius: 4px;
font-size: 18px;
cursor: pointer;
transition: background-color 0.3s ease;
}
.calculator-inputs button:hover {
background-color: #0056b3;
}
.calculator-results {
margin-top: 20px;
padding: 15px;
border: 1px solid #e0e0e0;
border-radius: 4px;
background-color: #e9ecef;
}
.calculator-results h3 {
color: #333;
margin-top: 0;
text-align: left;
}
.calculator-results p {
margin-bottom: 8px;
}
.calculator-results p strong {
color: #333;
}
.calculator-results p.green {
color: green;
font-weight: bold;
}
.calculator-results p.red {
color: red;
font-weight: bold;
}
.calculator-results p.orange {
color: orange;
font-style: italic;
}
.ramsey-home-calculator ul {
list-style-type: disc;
margin-left: 20px;
margin-bottom: 10px;
}
.ramsey-home-calculator ul li {
margin-bottom: 5px;
}
function calculateRamseyHome() {
var monthlyTakeHomePay = parseFloat(document.getElementById('monthlyTakeHomePay').value);
var targetHomePrice = parseFloat(document.getElementById('targetHomePrice').value);
var upfrontCashPercentage = parseFloat(document.getElementById('upfrontCashPercentage').value);
var mortgageInterestRate = parseFloat(document.getElementById('mortgageInterestRate').value);
var loanTermYears = parseFloat(document.getElementById('loanTermYears').value);
var annualPropertyTaxRate = parseFloat(document.getElementById('annualPropertyTaxRate').value);
var annualHomeInsurance = parseFloat(document.getElementById('annualHomeInsurance').value);
// Input validation
if (isNaN(monthlyTakeHomePay) || monthlyTakeHomePay <= 0 ||
isNaN(targetHomePrice) || targetHomePrice <= 0 ||
isNaN(upfrontCashPercentage) || upfrontCashPercentage 100 ||
isNaN(mortgageInterestRate) || mortgageInterestRate < 0 ||
isNaN(loanTermYears) || loanTermYears <= 0 ||
isNaN(annualPropertyTaxRate) || annualPropertyTaxRate < 0 ||
isNaN(annualHomeInsurance) || annualHomeInsurance < 0) {
document.getElementById('ramseyResult').innerHTML = 'Please enter valid positive numbers for all fields.';
return;
}
// 1. Maximum Recommended Monthly Payment (Ramsey's 25% Rule)
var maxRecommendedMonthlyPayment = monthlyTakeHomePay * 0.25;
// 2. Upfront Cash Amount
var upfrontCashAmount = targetHomePrice * (upfrontCashPercentage / 100);
// 3. Loan Amount
var loanAmount = targetHomePrice – upfrontCashAmount;
if (loanAmount home price
loanAmount = 0;
}
// 4. Monthly Property Tax
var monthlyPropertyTax = (targetHomePrice * (annualPropertyTaxRate / 100)) / 12;
// 5. Monthly Home Insurance
var monthlyHomeInsurance = annualHomeInsurance / 12;
// 6. Monthly Principal & Interest (P&I)
var monthlyPrincipalInterest;
var monthlyRate = (mortgageInterestRate / 100) / 12;
var numberOfPayments = loanTermYears * 12;
if (loanAmount === 0) {
monthlyPrincipalInterest = 0;
} else if (monthlyRate === 0) { // If interest rate is 0, it's just loan amount / number of payments
monthlyPrincipalInterest = loanAmount / numberOfPayments;
} else {
monthlyPrincipalInterest = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
}
// 7. Total Estimated Monthly Payment (PITI)
var totalEstimatedMonthlyPayment = monthlyPrincipalInterest + monthlyPropertyTax + monthlyHomeInsurance;
// 8. Affordability Check
var affordabilityStatus;
var affordabilityColor;
if (totalEstimatedMonthlyPayment <= maxRecommendedMonthlyPayment) {
affordabilityStatus = 'Within Ramsey\'s 25% Rule';
affordabilityColor = 'green';
} else {
affordabilityStatus = 'Exceeds Ramsey\'s 25% Rule';
affordabilityColor = 'red';
}
// Display Results
var resultsHtml = '
Ramsey Home Affordability Calculator
Use this calculator to determine if a home purchase aligns with Dave Ramsey's financial principles, focusing on affordability based on your take-home pay, a 15-year mortgage, and a substantial upfront cash contribution.
Your Ramsey Home Affordability Analysis:
'; resultsHtml += 'Maximum Recommended Monthly Payment (25% Rule): $' + maxRecommendedMonthlyPayment.toFixed(2) + "; resultsHtml += 'Calculated Upfront Cash Amount: $' + upfrontCashAmount.toFixed(2) + "; resultsHtml += 'Calculated Loan Amount: $' + loanAmount.toFixed(2) + "; resultsHtml += 'Estimated Monthly Principal & Interest (P&I): $' + monthlyPrincipalInterest.toFixed(2) + "; resultsHtml += 'Estimated Monthly Property Tax: $' + monthlyPropertyTax.toFixed(2) + "; resultsHtml += 'Estimated Monthly Home Insurance: $' + monthlyHomeInsurance.toFixed(2) + "; resultsHtml += 'Total Estimated Monthly Payment (PITI): $' + totalEstimatedMonthlyPayment.toFixed(2) + "; resultsHtml += 'Affordability Status: ' + affordabilityStatus + "; if (loanTermYears !== 15) { resultsHtml += 'Dave Ramsey strongly recommends a 15-year fixed-rate mortgage. Your selected term is ' + loanTermYears + ' years.'; } if (upfrontCashPercentage < 20) { resultsHtml += 'Dave Ramsey recommends at least a 20% upfront cash contribution to avoid Private Mortgage Insurance (PMI) and build equity faster. Your contribution is ' + upfrontCashPercentage + '%.'; } document.getElementById('ramseyResult').innerHTML = resultsHtml; }Understanding Dave Ramsey's Home Buying Principles
Dave Ramsey's approach to homeownership is rooted in financial peace and avoiding unnecessary debt. His "Ramsey Home Calculator" helps you align your home purchase with these principles, ensuring your home is a blessing, not a burden.
The 25% Rule
A cornerstone of Ramsey's advice is that your total monthly housing payment (including Principal, Interest, Taxes, and Insurance – PITI) should be no more than 25% of your monthly take-home pay. This conservative guideline ensures you have ample room in your budget for other financial goals, like saving, investing, and paying off debt.
The 15-Year Fixed-Rate Mortgage
Ramsey strongly advocates for a 15-year fixed-rate mortgage. While a 30-year mortgage might offer lower monthly payments, the 15-year option allows you to pay off your home much faster, save tens or even hundreds of thousands in interest, and achieve true debt-free homeownership sooner. The fixed rate protects you from fluctuating interest rates.
The 20% Upfront Cash Contribution (or More!)
Putting down at least 20% of the home's purchase price is another critical Ramsey principle. This significant upfront cash contribution offers several benefits:
- Avoid Private Mortgage Insurance (PMI): PMI is an extra monthly fee that protects the lender, not you, when your equity is less than 20%. A 20% upfront contribution eliminates this cost.
- Lower Monthly Payments: A smaller loan amount means lower principal and interest payments.
- Instant Equity: You start with substantial equity in your home, providing a buffer against market fluctuations.
- Better Interest Rates: Lenders often offer more favorable interest rates to borrowers with larger upfront contributions.
Understanding PITI (Principal, Interest, Taxes, Insurance)
When calculating your monthly housing cost, it's crucial to consider all components:
- Principal: The portion of your payment that goes towards paying down the actual loan amount.
- Interest: The cost of borrowing money from the lender.
- Taxes: Property taxes assessed by your local government, often included in your monthly mortgage payment (escrow).
- Insurance: Homeowner's insurance, which protects your home from damage and liability, also often included in escrow.
This calculator helps you factor in all these costs to get a realistic picture of your total monthly housing expense.
How to Use This Calculator
Simply input your financial details and desired home parameters. The calculator will then show you:
- Your maximum recommended monthly housing payment based on Ramsey's 25% rule.
- The estimated total monthly payment (PITI) for your desired home.
- Whether your desired home purchase aligns with Ramsey's affordability guidelines.
- Reminders about the 15-year mortgage and 20% upfront cash contribution recommendations.
Use these insights to make informed decisions and move closer to financial freedom with your home purchase.