‘You Need To Get A Home Inspection,’ Says Dave Ramsey, But Don’t Take It ‘Super Seriously’

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Buying your first home is exciting, but it also comes with a bunch of hidden costs. Financial expert Dave Ramsey recently took to X to break down what first-time homebuyers need to know before they sign the dotted line, including how to handle home inspections and closing costs.

Ramsey got straight to the point in a clip from one of his “The Ramsey Show” episodes. “Yes, you need to get a home inspection,” he said. But he added that you don’t have to panic about every little thing the report shows. “No, you do not need to take it super seriously. If they say the front porch light is blinking on and off, that’s not a reason to walk away from the deal.”

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What you should be looking for are the big issues. “Mold, foundations, heating and air systems that are about to go kaput,” Ramsey said. Anything minor can usually be handled without breaking the bank.

Ramsey also went deep on all the expenses first-time buyers usually don’t see coming, starting with escrow. “They’ll typically collect about three to six months of the property tax amount and three to six months of a homeowner’s amount,” he said. These are known as pre-paids and they’re used to set up your escrow account, which covers taxes and insurance.

Another hidden cost? Points and origination fees. “One point equals 1% of the loan amount. It will lower your interest rate about one-eighth of a percent per point you pay and it’s not worth it,” Ramsey told the caller. “Don’t do it.” Instead, he recommends asking for a “par quote,” which means no points and no origination fees. It results in a slightly higher interest rate but saves you money upfront.

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Even if you’re buying in a cookie-cutter subdivision, your lender will likely require a survey to confirm the house is actually on the lot. Ramsey said this usually costs $100 to $200.