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It’s not every day Dave Ramsey tells someone to take on debt. In fact, his entire brand is built on helping people get rid of it. But when a recently divorced dad called “The Ramsey Show” asking if a home equity line of credit could help him pay his ex-wife her share of the house, Ramsey surprised him with a rare “yes” — followed quickly by a reality check.
The caller’s situation was tight. He owed his ex-wife $150,000 for her half of the equity in their home. He had $70,000 saved but needed the rest by the end of August. His first mortgage balance was $110,000, the house was worth about $430,000 to $440,000, and his interest rate was a jaw-dropping 2.25 percent. His solution? A HELOC — short for home equity line of credit — which allows homeowners to borrow against the equity in their property and pay it back over time.
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“I don’t tell people to borrow money,” Ramsey told him, “but you’re already in debt. You’re in debt to your ex-wife, and we’re going to change that to another kind of debt called a HELOC.” In other words, he wasn’t advising the caller to pile on more debt, just to restructure the kind he already had. “Get her off your back,” Ramsey said.
Then he pivoted to the bigger question: “Why are you keeping the house?”
The caller explained that he loved the home, wanted to keep his kids in the school district, and thought stability was important for them. Ramsey didn’t buy it. “Neither one of them care,” he said of the children, ages four-and-a-half and five months. “You’re the only one that cares… A 5-month-old does not have any feelings except food and wet diapers.”
Co-host George Kamel suggested a hybrid approach — take out the HELOC, list the house, and use the sale proceeds to pay it off and put the remainder toward a new place. Ramsey agreed that was worth considering, especially for one very human reason: “Your next wife probably doesn’t want to live in the house where your ex-wife used to live in the same bedroom.”
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While Ramsey made it clear the caller could keep the home if he wanted, he stressed that after decades of financial counseling, most people in this situation keep a house for the wrong reasons. “Five years from now,” he said, “your world will look completely different. And it probably involves a different house.”
For homeowners in a time crunch like this caller, a HELOC can be a flexible option. Lenders such as Rocket Mortgage offer traditional revolving HELOCs for those with at least 15 to 20 percent equity, letting borrowers tap into their home’s value for large expenses and repay as needed. The company is known for upfront, transparent closing costs — typically between 2 and 5 percent — which can make the process smoother during a stressful financial pivot.
In this case, the math made sense. The emotional math was trickier. Ramsey’s advice was blunt but compassionate: it’s fine to take out the HELOC, fine to sell the house, and fine to move on.
What mattered was not clinging to a property out of sentiment when the wiser move might be starting fresh. And while a low mortgage rate is hard to walk away from, Ramsey reminded the caller that sometimes the right decision isn’t about the percentage — it’s about the peace that comes when the debts, and the baggage, are gone.
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This article Dave Ramsey Tells Divorced Dad With 2.25% Mortgage to Take Out HELOC to Get Ex-Wife ‘Off Your Back’—But Says He’s Keeping the House for the Wrong Reasons originally appeared on Benzinga.com
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