Should i use a Grant to buy a house | First Time Home Buyer Grants

So in this video, I’ll break down the grants we have available, when to buy a house and what formula to use. And I’ll even tell you the story of my professor

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1. Grants and Potential Credits
– Now the biggest thing pushing so much demand is the real estate market
– Is the lack of supply, not enough houses for the people that want some
– And also interest rates being so low, and grants being offered ( these are called incentives)

For example:
– Bank of America can get you up $17,500 if your first-time homebuyer
– Illinois Smart buy a program, pays up to 40k in your student loans if you buy a home there, and even give you up to $5000 for the downpayment
– Biden has his first time home buyers act( which is a tax credit 15k, when you buy your first home) – we don’t know exactly what’s going to happen with that

But the point is this:
– These are incentives to make you want to buy a home
– But buying a home is not like buying a tv on Black Friday or cyber Monday, where you put on a credit card and pay it off in a few months
– This is something that you’ll be paying for the 15-30 years

Tip: if your ready to buy a home, then great this is all just a bonus. But it should be the reason you buy a home.

2. How do you know your ready
– I’ll tell you this story
– I had a professor that in order for him to buy his first home, he had to only put down 3.5-5%, and even then he had to empty out of his account because he didn’t have money
– And he thought was normal ( because the Mortgage would be the same as his rent )
– But what happens if the heating breaks or the sewer backs up, or the roof starts to leak, where is he going to get that 3-10k to fixe it up
– When you buy a property and you make a 5% mistake, it could equal 5-10k ( its no joke )

Here is the right way to do it :
– You should only buy a home when you have no debt, so if you have to debt start paying it off using the avalanche method ( that means you pay the debt costing you the most money first )
– Then you save up for emergencies in Full ( 3-6 months )
– Then you save up for a decent down payment for a home, between 10-20% ( 20% helps you avoid mortgage insurance that can cost you a few thousand bucks extra a month )
– And remember to save 2-5% extra towards maintenance on the property ( but you could also save up for this once you have the property monthly )
– But this means that when you buy this property, You have no other debt payments, you have an emergency fund and you have a good down payment ( you’re ready )

So if you get a grant or a bonus or whatever: then great, but if you don’t, your still ready.

3. The 33% rule
– The house you choose to buy is equally important
– Because you don’t want to buy a house you cant afford
– And the entire point to buying and owning a house is for security and not needing to spend so much money on shelter

Here are the Basics of this rule:
– The house you buy cannot exceed 33% of your monthly income on a 15-year mortgage ( with all the expenses included )
– Expenses like Taxes, Mortgage, insurance, PMR, HOA fee, or maintenance
– This will leave you extra money to pay off the mortgage faster

To save money:
– Consider moving a little outside the city, longer commute I know
– Or switching states with all this I work from home stuff going on
– Or being a little more patient

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*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I’m an Accountant but I’m not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.

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