"Here's Why You Shouldn't Keep Your House"

Summary

Podcast Summary: The Ramsey Show Highlights

Episode: "Here's Why You Shouldn't Keep Your House"
Date: August 22, 2025
Hosts: Ken Coleman & Dr. John Delony
Caller: Lauren

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Brief Overview

This episode of The Ramsey Show Highlights centers around Lauren's real estate dilemma: after three years of living apart due to work, she and her husband can finally be together, but she's unsure what to do with the house she owns—and its "amazing" low interest rate. The hosts, Ken and John, walk her through the emotional and practical sides of the choice, ultimately making a strong case against keeping the house as a rental, even with the favored mortgage rate.

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Key Discussion Points & Insights

1. Lauren’s Situation: The High-Level Dilemma [00:36 - 01:22]

• Lauren explains she owns a home with a low mortgage balance ($122,000), a great interest rate (2.875%), and an estimated market value over $200,000. Her husband rents (closer to their work), and she’s unsure whether to keep or sell her home.
• Emotional hesitation: Lauren admits feeling nervous about selling, largely due to the attractive interest rate and the idea of starting over with a higher mortgage payment.

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2. Hosts' Immediate Advice: Don’t Be Swayed by the Interest Rate [01:14 - 01:28]

• John: “Who cares about that stupid interest rate, man?”
  — Suggests Lauren sell now, use the equity for a new chapter, and not get stuck on past financial benefits.

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3. The Practical Problems with Being a Landlord [01:49 - 04:39]

• Ken and John stress that being a long-distance landlord, especially with zero experience in maintenance, is fraught with hassle, cost, and stress.
• Ken: “You're two hours away and you don't know anything about home repairs. You have to hire somebody.” [03:28]
• Even if Lauren nets $500/month as a landlord (an optimistic estimate), after repairs and emergencies, she might only clear $3,000–$4,000/year, hardly worth the risk and headaches.
  • Ken: “All that nuisance, all that worry for maybe $3,000, $3,500, $4,000 a year. It's just not worth it. That's why we were so quick to say sell it and move on.” [04:07 - 04:39]

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4. Deconstructing Emotional Attachments and Money Myths [02:18 - 05:32]

• John: Frames the decision as the closing period at the end of Lauren’s previous life chapter—selling the house helps her move forward emotionally and logistically. [02:24]
• Both hosts urge Lauren (and listeners) not to let the low interest rate “park your whole life.”
  • John: “People are parking their whole lives on a once in a millennium interest rate.” [01:22]
• Worst-case landlord scenarios are given: blown pipes, last-minute repairs, hotel expenses for tenants. All those costs can easily wipe out any potential rental profits.

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5. Options: Market Sale or Family Deal—But No Half-Measures [05:41 - 06:22]

• Lauren’s adult daughter is interested in renting or buying the house.
  • John: Not opposed to Lauren cutting her daughter a fair deal (e.g., $25k–$50k below market) if she wants, but stresses the importance of a clean, documented sale—no informal “sweetheart” arrangements or shaky financing.
• Ken: “But don't start getting tricky with financing. She needs to be a big girl. And she goes and does it.” [06:29 - 06:47]

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6. Emotional Resolution and Next Steps [07:08 - 08:41]

• The decision is clear: Sell the house, cash in the equity, and move forward as a family.
• Step-by-step: Interview two or three real estate agents, pick the one who educates and supports Lauren, and let them guide her through the sale. [07:22]
• John provides a visualization exercise:
  • Imagine the satisfaction of a $105,000 bank balance over a “2.875%” rate in your mind.
    • John: “Which number do you like looking at more?”
      Lauren: “Big one.”
      John: “That's right. Sell the house.” [08:00 - 08:27]

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Notable Quotes & Memorable Moments

• John: “Who cares about that stupid interest rate, man?” [01:14]
• Ken: “You're two hours away and you don't know anything about home repairs. You have to hire somebody.” [03:28]
• Ken: “All that nuisance, all that worry for maybe $3,000, $3,500, $4,000 a year. It's just not worth it.” [04:07]
• John: “America, stop holding up your life for a freaking interest rate. If you gotta move, if you gotta change jobs, go, go.” [08:29]
• John (visualization exercise): “I want you to imagine you're looking at your laptop, at your checking account that has $105,000, which is what you've cleared. Which number do you like looking at more?” [08:00 - 08:27]
• Ken: “I loved that visualization because I was envisioning her money in my account. I don't know if that was supposed to be what happened, but, boy, that's where I went.” [08:41]

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Actionable Advice for Listeners

1. Don’t let a low interest rate dictate your life decisions—factor in the full picture, including quality of life.
2. Avoid being a long-distance landlord unless you’re truly prepared for the costs, responsibilities, and stress.
3. When selling to family, keep the transaction clean, formal, and fair—no informal deals or tricky financing.
4. Interview real estate agents before listing; choose the one who makes you feel educated and comfortable.
5. Focus on the future: The freedom and financial clarity from selling will outweigh sentimental attachments to old financial arrangements.

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Conclusion

This upbeat, advice-driven episode of The Ramsey Show delivers a clear, actionable message for those clinging to “golden” mortgage rates: don’t let numbers from the past hold you back from building a better—more unified and less stressful—future. Sell, step forward, and embrace the next chapter with confidence.

Transcript

[Narrator]

Mike and Alyssa are always trying to outdo each other. When Alyssa got a small water bottle, Mike showed up with a four litre jug. When Mike started gardening, Alyssa started beekeeping.

[Ken]

Oh, come on.

[Narrator]

They called a truce for their holiday and used Expedia trip planner to collaborate on all the details of their trip. Once there, Mike still did more laps around the pool.

[Ken]

Whatever.

[Narrator]

You were made to outdo your holidays. We were made to help organize the competition. Expedia made to travel.

[Ken]

Brought to you by the EveryDollar app. Start budgeting for free today.

[Lauren]

I had a question. My husband and I are finally able to live together after being married for three years. But I own my house and he doesn't. He rents, but because of our jobs, you know, his house is a better option to live at. Just not sure what to do with my house. It's got that great interest rate. It's. You know, I'm not, I'm not sure what to do.

[Ken]

What's it worth? If you were to sell it today.

[Lauren]

Probably to over 200, 220.

[Ken]

What do you owe?

[Lauren]

122. 122,000.

[John]

Sell it today and put 100,000 down on a new house. Both get out of his rent house and you find yours. Who cares about that stupid interest rate, man?

[Ken]

You don't want to be a long distance landlord.

[John]

People are parking their whole lives on a once in a millennium interest rate.

[Ken]

Yeah. Let's play this out a little bit. Let's play it out because I hear the doubt and we love doubt. Doubt's not bad. Love it. Let's put this to the test. Okay, so let's say you keep it at that fabulous interest rate that you're in love with. What do you think you would rent it for? Any idea?

[Lauren]

Well, I think it depends on the renter. My, my, my daughter, she's an adult. She's actually interested in either renting it herself or buying it.

[Ken]

Give her a great deal. Let's keep playing this out. Let's play the renting thing out. Because you presented us with. I kind of emotionally want to keep the house. Am I right?

[Lauren]

No, I don't think I'm emotionally tied to it.

[Ken]

You seem very confused by John's suggestion. You don't say.

[John]

Your this is the last attachment to your former life.

[Ken]

Oh, is this true?

[John]

And you may have gone through a divorce or somebody passed away and you got up and you dusted yourself off and you worked your butt off and bought a home and you've paid off half of it. And by moving in with this Person, your husband. By the way, this is the period at the end of that former sentence, right?

[Ken]

Yeah.

[Lauren]

Well, I am just so nervous. I just hate the thought of so much of that new house payment going to stuff so much interest. It just makes me sick.

[John]

So much so that you're going to have $100,000 brick tied around your ankle when you move in with your husband after three years in a new state.

[Lauren]

No, it's. I mean, I, I move right now. Right now. That's.

[Ken]

All right. Let me, let me go back to where I was going. Let me go back to where I was going. Here's why you shouldn't keep the house. Number one, you're going to be long distance landlord. I don't care if you, if it's your daughter renting or someone else. True or false.

[Lauren]

Two hours away. Yeah. Yeah.

[Ken]

The answer is yes, Ken. Okay, next. All right, so.

[Lauren]

And, and let's add to that, that issue. I'm not, I don't know home repairs.

[Ken]

I know you don't. I know. I'm getting ready to make this situation worse. All right, so you're two hours away and you don't know anything about home repairs. You have to hire somebody. Now let's talk about how much actual money you would make on renting this house. Okay. What I was trying to get at, I never got an answer from you is, is what is the market based rent for that house? You don't have to tell me now because we don't need to get bogged down. But here's what I'm going to tell you. You will be shocked if you run the numbers, John, at what you can get in rent versus your mortgage payment. Okay. And let's just say you cleared 3, 4, 500 bucks a month. Is that a fair guess?

[Lauren]

I could, yeah.

[Ken]

Okay, great. Let's say 500. Let's be aggressive in my example, okay? Okay. 500amonth times 12 is $6,000 a year. That's your gross that you're going to get. Then you got home repairs, somebody taking care of the house. That's all on you. So you aren't even going to net $6,000 a year. All that nuisance, all that worry for maybe 3,000, 3,500, 4,000 a year. It's just not worth it. That's why we were so quick to say sell it and move on.

[Lauren]

Yeah. Oh, yeah, that's, that's when you lay it all out like that, man, I really was stuck on the interest rate too. At 2.875, I know, and I wanted.

[Ken]

To destroy the emotion around that because guess what's gonna. Guess what? When you get a call at 10 o' clock on a Saturday night and you've just settled down with some ice cream to watch a movie. And the, and the person who's renting your house goes, we had a water pipe burst. And you're gonna go, ha, man, that's a bummer. But 2.875%, I'm doing the happy dance.

[John]

And then you're gonna call somebody, they're just say, cool. It's gonna be $6,500 to repair it. We'll get it done on Saturday.

[Ken]

Yeah.

[John]

And then your tenant's gonna say, whoa, whoa, whoa. In our lease, you have to put me up in a hotel and I have to actually have two rooms because there you go, sell the house.

[Ken]

But you know. No, no, no, because what you're gonna do is you're gonna go, man, that's a bummer. Just out of pocket, 10 grand. But boy, that interest rate is.

[John]

I love that interest rate.

[Lauren]

No, no, no, it doesn't sound so good anymore. So you would just sell, then just put.

[John]

No, that's you being dramatic. No, sell it for market value.

[Lauren]

I'm like, that's what I'm wondering, what is the. What you guys recommend?

[John]

I would rec. I would get a, I would get a real estate pro in that area and do. And sell the house. Or I'm not opposed to you cutting your daughter a deal. You got $100,000 in equity and maybe you say, I'm going to knock off 25 grand for you because I love you, or 50 grand. Who? I mean, you pick the number. I'm going to sell it to you for 150 grand. I'm going to take $50,000 into my three year old marriage that we're finally combining our households. Honey, I'm not living in your gross rent house because sick. We're getting a new place and I got $50,000 to put down on it.

[Ken]

Yeah. And then your, your daughter's got a great start. That's not. I like that option.

[Lauren]

That's actually what I wanted to do. And I talked about that with her too. Like if that's what they decided to do with her. And eventually I was gonna say get.

[Ken]

Married, but I was gonna say, as a parent, don't do any sweetheart deals just for the daughter. This needs to be a big girl deal. Now you cut her, cut her a break on the, the overall total. But don't start getting tricky with financing she needs to be a big girl. And she goes and does it.

[John]

Just like everybody mortgage and buys the house from you. We're not gonna shake hands. And you just pay the mortgage.

[Ken]

That's my only concern.

[John]

Then you're gonna blow up every Christmas from here the next day.

[Lauren]

Why? I told her flat out, like, I'm 42 years old. I can't start out. You know what I mean? Like a full house payment. Like, I need to have that chunk to put down to make sense where.

[John]

I'm at my life.

[Lauren]

I don't want to start over.

[Ken]

So we gave you nothing. We gave you two really good options, but they're both. Sell the house and let's. Let's move and let's. And you said you were ready to go today. I think this is the last piece. Yeah, this is great. List it.

[Lauren]

Go.

[Ken]

Listen. Go to Ramsey Solutions.com and look up the real estate pros. Interview two or three of them. Have them come over and look at the house. Go with the one that you like the most, that feels like they've educated you. And let a pro walk you through this process. And to begin to exhale and get excited about this new chapter.

[John]

Can I do. Can you do one exercise for me? I want everyone listening at home in this similar situation to do this exercise. But will you do this with me?

[Ken]

Can I do it as well?

[John]

You can, Ken.

[Ken]

Okay.

[John]

All right. Are you ready? All right, Lauren, close your eyes. And I want you to picture that interest rate. What's the number? 2.753.

[Lauren]

2.875.

[John]

I want you to see those numbers. Okay, John, now I want you to open your eyes real quick. That's a little palate cleanser. Close them again. And I want you to imagine you're looking at your laptop, at your checking account that has $105,000, which is what you've cleared.

[Ken]

Oh, I like it.

[John]

Which number do you like looking at more?

[Lauren]

Big one.

[John]

That's right.

[Ken]

Bank account.

[John]

Sell the house.

[Lauren]

Awesome.

[John]

And America, stop holding up your life for a freaking interest rate. If you gotta move, if you gotta change jobs, go, go.

[Ken]

I loved that visualization because I was envisioning her money in my account. I don't know if that was supposed to be what happened, but, boy, that's where I went. Create your free every dollar budget today. The simplest way to budget for your life.