How old do you have to be to buy a house?
There’s no minimum age to buy a house, but homebuyers who are minors will need a guardian to cosign legal documents. While it’s possible for minors to buy a house, most lack the financial resources to do so.
There is no specific age requirement for buying a house. Anyone who is legally able to enter into a contract can purchase a property — which typically means being at least 18 years old — and minors may even be able to do so with the approval of a guardian. However, it's important to note that purchasing a home requires a significant financial commitment and responsibility, and it's essential to have a stable financial and personal situation before taking on this responsibility.
If you’re young and want to buy your first home, let's look at what age you need to be — and how age can impact the process, even if it isn’t legally standing in your way.
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In most states once you turn 18 you are old enough to reach the age of majority, which enables you to complete the legal documents required to buy a home. This means that in most states you can legally buy a home on your own starting at the age of 18 — the exception being that in both Alabama and Nebraska you reach the age of majority at 19.
For most people, that age minimum is reasonable, since few teenagers have the resources to buy a home anyway.
But if you have the capital, can you buy a house at 16, or even younger? The answer is technically yes, but if you are still a minor you’ll need someone (like a parent) of legal age to cosign all of the legal documents.
Let’s refocus on potential homebuyers who are over 18 as they’re more likely to be ready to buy a home than the average teenager. Where young folks may run into barriers is when it comes time to obtain a mortgage loan (unless you can make an all-cash offer). At any age you will need to meet lender requirements to be approved for a home loan, and being younger can make that harder to do. How so?
To start: Proving to the lender that you can afford to make your mortgage payments is hard when you’re young, as you need to show a history of consistent employment. In addition, if you’re young you likely won’t have a strong credit score yet. It takes many years to build a good credit score, making it easier to qualify for a mortgage.
If you have enough cash on hand to afford a large down payment and closing costs, you can qualify for a mortgage without a strong credit score. That said, when you have a low credit score you’re more likely to pay higher interest rates which can increase the cost of homeownership greatly over the life of your loan.
Again, age isn’t an outright barrier when it comes time to buy a home, but being young can make your journey to homeownership more complicated. Here are a few factors that will help you be more eligible for a home loan.
Your DTI compares how much debt you have in comparison to your income once you take on a home loan, which helps signal to lenders how manageable your mortgage loan will be. If you have student loan or credit card debt, try to pay it down before you apply for a mortgage to lower this ratio. The lender will take what your DTI will be if they grant you a mortgage loan into account to make sure your budget won’t be too tight.
Lenders like to see proof of a stable income that indicates you will be able to make your mortgage payments, as well as other costs associated with homeownership like property taxes, maintenance, and insurance.
While conventional loans only require a minimum of a 3% down payment and FHA loans only require 3.5%, it’s ideal to save much more than that to make it easier to obtain an affordable mortgage with a lower interest rate. You need to make a down payment of 20% if you want to avoid paying for private mortgage insurance (PMI).
On top of a down payment, you need to have enough savings to cover other expenses like the appraisal and inspection, mortgage loan fees, and closing costs.
The higher your credit score is, the easier it will be to obtain a mortgage with favorable rates and terms. If you aren’t in a rush, spend some time building up your credit score before you apply for a home loan.
If you find that you aren’t ready for homeownership just yet, you have a few options for how to work towards that goal while you wait until the time is right. Here’s how to make the most of those options.
If your parents or another family member like a grandparent will let you stay with them for free or at a discounted rate, you can save a lot of money to put towards a bigger down payment. It’s easier to qualify for a home loan when you don’t need to borrow a lot of money and a big down payment can help reduce the amount you borrow.
Every time you pay rent, it can feel like you’re making less progress towards your financial goals — but that doesn’t need to be the case. Confirm that your landlord is reporting your rent payments to one or more of the three main credit bureaus (Experian, TransUnion, and Equifax) as those payments can help improve your credit score. If your landlord doesn’t report your payments, you can pay to use a third-party service that will report your rent payments to the credit bureaus.
You also have the option to enter a rent-to-own agreement which lays a more clear cut path to homeownership by allowing you to rent a specific home until you are ready to purchase it (with your rent payments making up the down payment).
If you really don’t want to wait to buy a home, you can look for assistance. First-time homebuyers will likely find it’s easier to qualify for a first-time home buyer mortgage loan or an assistance program that provides financial support for those looking to buy a home for the first time. Usually these programs require smaller down payment amounts, provide forgivable loans, or allow you to skip paying PMI even with a low down payment.
When it comes to homeownership, age is just a number and not the most important one. Having a solid down payment, a high credit score, and proof of a consistent income will play a much bigger role in the mortgage approval process than your age will. While it’s true that it’s easier to obtain these qualifications when you’re older, being young doesn’t necessarily halt your dreams of ownership.
There’s no perfect age buy a house. Younger buyers may have more time to build equity in their homes, while older buyers may be more interested in downsizing or purchasing a retirement home. Ultimately, the best age to buy a house is when you are financially prepared and are ready to take on the responsibilities of homeownership.
Reaching a certain age is less important than ensuring you’re ready for the responsibilities of buying and owning a home — financial and otherwise. Evaluating your finances, lifestyle, and preparedness to commit to the responsibilities of homeownership can help you determine if you're ready to buy.
The greatest hurdle for young people buying a house is securing a mortgage. Most people don’t have a strong enough credit history or money saved to qualify for a home loan. If you’re planning on buying a house young, plan on making an all-cash offer or providing ample documentation of a stable income, a good DTI, credit score, and savings.
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