4 min read
Jeremy from Lexington, Kentucky, called into The Ramsey Show with a complex financial puzzle: He and his wife owe roughly $110,000 in student loans and credit card debt — not including a Parent PLUS loan in his father’s name that he’s promised to repay.
His proposed solution? Take out a new mortgage to purchase his dad’s house — a property Jeremy already lives in and was set to inherit — and use the loan proceeds to pay off all the existing debt.
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The idea, he argued, would simplify payments and provide some tax benefits.
However, hosts of The Ramsey Show weren’t convinced.
Jeremy explained that he and his wife live in a double-wide mobile home on five acres of land — a property still under a $23,000 mortgage held in his father's name. They pay just $460 a month in rent, essentially covering the mortgage.
Although his father originally intended to gift the property after passing, Jeremy plans to get a mortgage now to buy the house outright, then use the funds to pay off his and his wife’s student loans, their $10,000 credit card balance and the Parent PLUS loan under his father’s name.
“He makes six figures. So on the Parent PLUS loan, we've agreed that I'd pay that back. That was an agreement we made in high school,” Jeremy explained. “[My wife] makes $45,000 a year, I make $53,000. ”
His logic? Consolidating everything into a single payment would ease their financial stress — and maybe even provide a mortgage interest tax deduction.
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George Kamel and co-host Ken Coleman quickly dismantled the plan.
“Making a hundred grand with as low rent as you guys have, you should be able to throw a few thousand dollars a month at this debt,” Coleman said.
The hosts estimated that, if the couple tightened their budget and focused on debt reduction, they could knock out their $110,000 balance in two to three years.
Using the debt snowball method, they’d tackle their smallest balances first, build momentum and gradually eliminate each debt without adding another mortgage.
