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Housing costs are absolutely brutal. Right now, the median home price in the US is just over $400,000 and mortgage rates are hovering around 6.5%. So first time buyers are considering more creative ways to buy a home. And by creative ways, I mean desperate shortcuts that can lead them right off a financial cliff. So today we're gonna break down five dangerous home buying shortcuts, why they're a bad idea, and how to buy a home without destroying your financial future. Let's get. Okay, here are five shortcuts to home ownership that can absolutely wreck your finances. Starting with zero down loans. On one hand, buying a house with no money down sounds freaking awesome. I mean, why save up tens of thousands of dollars and delay buying a home if you don't have to, right? Well, here's why. You have zero equity in your home from day one. You'll also have higher monthly payments because you're financing the entire purchase price. Plus, you'll have to pay for private mortgage insurance, AKA pmi, which protects the lender because they see you as a risky borrower. And here's the real kick. If the market turns and home values drop even slightly, you'll be underwater on your mortgage. Like Jack was underwater when Rose essentially murdered him by not scooting over a little bit. Just a skosh could have saved a life. Save a Jack, scoot a skosh, Save a Jack, scoot a skosh, save a Jack scooter Sko. That would be. Yeah, I'd wear that shirt. Here's what that means. You'll owe more than the house is worth. So until the value goes back up, you won't be able to sell without writing a check on top of all the fees. And it's not just zero down payment loans I'm not a fan of. It's pretty much any loan with a low to no down payment. That includes FHA loans, VA loans, and USDA loans. I get that these government programs exist to help people, but between the restrictions they have, the additional fees and often higher interest rates, they are a wolf in sheep's clothing. And if you want more details about these and other types of loans, check out my book, Breaking Free from Broke. I've got a whole chapter on mortgages that gets into the nitty gritty details. And for first time buyers, I recommend at least a 5 to 10% down payment on top of being debt free with a full emergency fund. And. And if you can swing 20% down or more, even better because that will eliminate the pesky PMI and puts you in a much stronger financial position from day one. Oh, and by the way, lowers your monthly payment. Now, for most people, a conventional fixed rate mortgage is the best way to go. Not these government backed loans which really just get people into homes that will become a burden instead of a blessing. Okay, terrible home buying. Shortcut number two, co signing with parents or friends. Unless you're looking for a complicated way to destroy a relationship with someone you love, please don't do this. When someone like your mom or your dad co sign your loan, they are legally responsible for that debt. So if you can't make the payments, and statistically if a cosigner is required, the lender is betting you can't. Guess whose credit and financial world gets trashed. Yep, yours and your mom's. By the way, tell her I said hi. And do you really want to cause chaos for your family because you bought more house than you could afford? I don't think so, Tim. So here's the truth. If you need a cosigner to qualify for a mortgage or any other type of debt, that is the market telling you you're not ready. And that's okay. Just push pause and wait until you can afford the loan all by yourself. Okay, shortcut number three, stretching your budget to the max. Fun fact, banks will approve you for way more house than you can actually afford. Because the more money they loan you, the more money they make. They don't really care if your house poor for the next 30 years, not their problem. They'll just foreclose on the house and take it back. But when you max out your mortgage approval, you leave zero margin and buffer for life. Happening things like home repairs, maintenance, job loss, having kids, unexpected medical bills, having more kids, more medical bills for having more kids. The list goes on. And here's something a lot of people don't realize. Your monthly mortgage payment can actually go up over time, even with a fixed rate mortgage. In fact, it's pretty common. You see, your monthly mortgage payment typically includes things like property taxes and homeowners insurance. And if either one of those goes up, so does your payment. A recent report found that over the past three years, homeowners saw their insurance premiums increase by an average of 24%. And for Utah, it jumped 59%. How did that happen? I'm guessing the Secret lives of Mormon wives had something to do with it. You heard it here first. He's probably right. Now that's a lot. And if you're already stretched thin, where is that extra money gonna magically come from. So the bottom line here, don't buy as much house as the bank approves you for. Buy a house that leaves you some margin, that breathing room. And that's why I always recommend making sure your total mortgage payment is no more than 25% of your after tax monthly income. And if that sounds conservative, it is. Because life is going to happen. You got to be prepared. And you need money left over to do other things like invest for your retirement, save for your kids college, pay off the house early, and you know, go on vacation and stuff. Okay, this next home buying shortcut sounds like a great little housing hack, but it's super risky and that is relying on a tenant to pay your mortgage. Rental income can be a great way to make extra money, but completely relying on it to afford your house, that's playing with fire. Because what happens when your tenant moves out? Or what if they stop paying rent? Or worse, what if they start raising lizards for fun and profit? And what if rental regulations change in your area and you can't charge what you thought you could? Look, if you can't afford the mortgage without rental income, you can't afford the house. Period. Now by all means, rent out your spare bedroom if you want, but treat rental income as a bonus, not a necessity. Because the bank doesn't care. If I had to Evict Brandon and 17 of his lizards, they still want their money every single month. And yeah, there were 18 lizards originally, but one of them is mine now. His name is King Gizzard, which makes me the lizard wizard. Not funny. Next shortcut on the list, creative financing. This would include things like seller financing, rent to own agreements and adjustable rate mortgages, aka ARMs. These often have hidden fees, balloon payments and higher interest over time. And let's not forget about assumable mortgages, which got trendy on social media for a second, which involves taking over someone else's low rate mortgage. And these are actually real, but they're not at all common and they're nearly impossible to pull off in reality. And there's a reason why, in fact, I made a whole video breaking down assumable mortgages. And I'll drop a link in the description if you want to check it out after this. So at this point you might be thinking, yeah, George, I get it, these shortcuts are all way too risky. But how in the world am I supposed to get a house in my lifetime with these prices and these interest rates? Well, I'll tell you, but first let's talk about your bank. When you're Saving up your down payment. Having the right financial institution can make your whole experience so much better. And that's why I love Fairwinds Credit Union, a sponsor of today's video. They're owned by their members, not by Wall street, which means they're not out here trying to increase shareholder value. Unlike those big national banks that slap their names on the side of football stadiums, they're focused on helping you win with money. And with over 33,000 free ATMs and 5,000 credit union partners nationwide, you're covered just about anywhere. So go check them out today@fairwinds.org Ramsey or or use the link in the description below. Okay, here's how to buy a house the right way when prices and interest rates are sky high. First up, play the long game. Budget aggressively. Pay off your debt and save up a solid down payment. 5 to 10% if you're a first time buyer is okay, 20% or more if you want to avoid PMI. Yes, this will take longer, but it's worth it because it doesn't destroy your financial future. Next up, focus on total cost, not just the price tag. Consider things like property taxes, insurance, HOA fees, utilities and repairs. That principal and interest is just the beginning. You got to factor in the real cost of ownership. And finally, consider stepping stone homes. Start with something smaller, build some equity and move up over time. Your first home likely isn't your forever home. Heck, your second home likely isn't your forever home. For me, my forever home? Heaven. You joke, but it's true. So let's acknowledge reality here. If you do these three things, it's probably going to take longer, you'll need to save up more money, and you might have to settle for a smaller house in a less trendy neighborhood. But it's way better than the alternative. Buying a house you really can't afford and potentially losing that house later on and a lot of money along with it. Plus, buying the right way gives you margin for other financial goals like investing for retirement, saving for your kids college, and giving to people and causes you care about. It worked for me, and it can work for you too. And it's not going to happen overnight. So look, you don't need a hack, you just need a plan. And if you want to own a home and use it to help you build wealth, check out my free home buying course that walks you through the entire process of buying a home the right way. Again, it's totally free and I'll drop a link in the description, but even after you take that free course. Do not buy a house until you know exactly what it's going to cost you. And I made a whole video about the sneaky hidden costs of home ownership, so check it out by clicking right here or use the link in the description. Don't forget to like and subscribe and share this video with someone who needs to know about their true forever home. Thanks for watching. We'll see you next time.