Podcast Summary: The Ramsey Show Highlights – "Use A Mortgage To Pay Off My Student Loans?"
Episode Details:
- Title: Use A Mortgage To Pay Off My Student Loans?
- Host: Ramsey Network
- Release Date: July 19, 2025
- Duration: Under 10 minutes
Introduction and Context
In this episode, Jeremy reaches out to seek advice on managing significant student loan debt for both himself and his wife. Their financial situation is compounded by a credit card debt and a Parent PLUS loan held by Jeremy's father. Jeremy contemplates using a mortgage loan to consolidate these debts, leveraging his father's property as collateral.
Jeremy's Financial Dilemma
Total Debt Overview
- Student Loans & Credit Card: Approximately $110,000
- Parent PLUS Loan & Current Mortgage: An additional $23,000
Jeremy explains that both he and his wife are burdened with student loans, while also facing high-interest credit card debt. Jeremy's father has a Parent PLUS loan, and the family is exploring the possibility of using a mortgage from purchasing his father's property to consolidate and pay off these debts.
Key Quote:
“We have a credit card and my dad has a Parent plus loan. Now, the education system hasn't really told us to what to do for a Parent plus loan...”
— Jeremy [00:06]
Dave's Initial Assessment
Dave begins by clarifying the total debt Jeremy and his wife are facing, noting that the $110,000 figure includes both student loans and credit card debt, but excludes the Parent PLUS loan. He inquires about their current living situation and income, which totals approximately $100,000 annually ($53,000 from Jeremy and $45,000 from his wife).
Debt Repayment Timeline Concerns
- Jeremy's Proposal: A 7-year plan to pay off $100,000 in debt.
- Dave's Recommendation: Aggressively tackle the debt using the debt snowball method, potentially clearing it in 3-4 years by allocating $4,000 monthly towards debt repayment.
Notable Quotes:
“How quickly can we pay off 110,000? That becomes the equation, right?”
— Jeremy [03:03]
“If you're doing the debt snowball method that we teach and you're aggressively attacking your debt... you would knock this thing out in probably closer to three or four years at this rate.”
— Dave [03:41]
George's Input and Concerns
George voices skepticism regarding Jeremy's approach to debt consolidation. He emphasizes that Jeremy and his wife are attempting to find a shortcut, which complicates their financial situation further. George questions the rationale behind moving from high-interest debts to a mortgage, especially when the property in question is depreciating in value.
Key Points:
- Complexity of Strategy: Consolidating debts into a mortgage adds layers of complexity without substantial benefits.
- Property Value Decline: The property, described as a "double wide," is decreasing in value, making it a poor asset to leverage for debt consolidation.
Notable Quotes:
“This feels like it's become too complex because it feels like they're trying to find a shortcut.”
— George [04:29]
“Don't do this... Not a double wide. Jeremy, that's like a country song.”
— George [06:58]
Dave's Final Advice
Dave firmly advises against using a mortgage to consolidate debts. He highlights that the strategy Jeremy proposes does not address the root cause of their debt accumulation and instead extends their financial obligations. Instead, Dave urges Jeremy and his wife to focus on paying off their existing debts using their strong combined income by minimizing expenses and applying a disciplined debt repayment plan.
Actionable Recommendations:
- Increase Income: Explore opportunities to boost earnings.
- Reduce Expenses: Tighten the budget to free up more funds for debt repayment.
- Implement Debt Snowball: Prioritize debts from smallest to largest, eliminating them systematically.
- Avoid Further Consolidation: Refrain from taking on additional loans or leveraging depreciating assets.
Final Quote:
“No more deals with dad, no more scheming, no more moving one debt to another. Just pay off your freaking debts.”
— Dave [07:16]
Conclusion
The episode underscores the importance of addressing debt through proven methods like the debt snowball rather than seeking complex consolidation strategies that may lead to further financial strain. Dave and George collectively advocate for simplicity, discipline, and a focused approach to becoming debt-free, emphasizing that leveraging depreciating assets or incurring additional loans is not a viable solution.
Key Takeaways:
- Consolidating high-interest debts into a mortgage is not advisable, especially when the collateral is a depreciating asset.
- With a combined income of around $100,000 and minimal living expenses, Jeremy and his wife can aggressively pay down their debts within a few years.
- Maintaining clear financial goals and avoiding unnecessary complexity are crucial for achieving financial freedom.
Encouraging Quote:
“Create your free EveryDollar budget today. The simplest way to budget for your life.”
— Dave [07:52]