Dear Dave,

I’m 28, single, and I just became debt-free. In addition, I make $70,000 a year and have the equivalent of six months of expenses set aside for emergencies. Should I save up to pay cash for a house, or is mortgage debt okay? I’d like to keep the price of a new home between $200,000 and $225,000. Since I currently live in a nice apartment, I think I can save about $20,000 a year. What do you think?

— Kathryn

Dear Kathryn,

It sounds like you’re in great financial shape. Congratulations on becoming debt-free!

Let’s take a look at both scenarios. If you can save $20,000 a year, that means you’re about 10 years away from a nice, paid-for home, and you’re still debt-free. That’s one option.

At the same time, I don’t yell at people for taking out a 15-year, fixed-rate mortgage, where the payments are no more than 25 per cent of their monthly take home pay.

In this situation, you could save like crazy for a couple of years and make a big down payment on a home in the price range you’re talking about.

Then, you could pay off that house in just 15 years.

I honestly don’t have a problem with either solution, Kathryn, but think about this. Wouldn’t it be great to have your own home, and still be completely debt-free, at 40?

It’s something to think about!

— Dave

• Dave Ramsey is CEO of Ramsey Solutions. He has authored seven best-selling books, including The Total Money Makeover. The Dave Ramsey Show is heard by more than 13 million listeners each week on 585 radio stations and multiple digital platforms. Follow Dave on the web at daveramsey.com and on Twitter at @DaveRamsey