Owning a house is often seen as a major life milestone and a sign of financial stability. With house prices rising and affordability declining in many markets, prospective homebuyers are wondering if they can realistically purchase property at a young age.
While there is no legal minimum age for buying a house, there are practical considerations regarding financing, income, and general readiness that factor into homeownership timelines. By exploring legal requirements, mortgage eligibility, financial preparation, and other key issues, we can better understand the youngest realistic age to own a house.
Can You Legally Buy a House at 18?
There are no laws prohibiting 18-year-olds from purchasing real estate in the United States. Legally, an 18-year-old is considered an adult and has the right to enter into contracts, including mortgage agreements. So it is possible for an 18-year-old to buy a house.
However, just because it is legal does not mean it is necessarily practical or advisable. Very few 18-year-olds have the financial means, credit, and income to obtain mortgage financing and cover the many other costs of homeownership.
Key Legal Considerations
While an 18-year-old can legally buy a house, there are some important legal considerations:
- They must be able to enter into a legally binding contract for a mortgage loan and real estate transaction.
- Their income has to be verifiable for loan qualification purposes.
- They need a strong credit history and credit score to get approved for a mortgage.
- They may not be able to buy a house without involving a co-signer over the age of 21 to meet lender requirements.
- They have to be able to cover transaction costs including down payment, closing fees, and prepaid costs.
Additionally, they take on major legal and financial obligations by signing a mortgage note and becoming a titled homeowner. So while it is legally possible, many 18-year-olds face substantial barriers to homebuying.
Can an 18-Year-Old Get a Mortgage?
Obtaining mortgage financing is one of the biggest hurdles for young prospective homebuyers. Most lenders have limits on borrowers’ age and strict income and credit requirements that make it very difficult for 18-year-olds to qualify.
Mortgage Age Minimums
Many conventional mortgage lenders require borrowers to be at least 18 years old. However, they often have additional age requirements, such as:
- Minimum age of 21 for financing a single-family home purchase
- Minimum age of 18 for condo purchase with maximum 80% loan-to-value ratio
- Minimum age of 23 for condo purchase with higher loan-to-value ratio
FHA loans, a popular financing option for first-time buyers, require borrowers to be at least 18 years old. VA loans have no explicit minimum age, but do require sufficient income and credit.
Overall, 18- and 19-year-old borrowers face substantial limits on the type of mortgage financing they can obtain. Very few lenders will underwrite a mortgage for a borrower under 21 without a cosigner or other offsetting factors.
Income Requirements
Lenders require stable income to qualify for a mortgage. Most 18-year-olds have entry-level jobs or are still in high school or college. Typical incomes at age 18 often fall short of lender standards, which often start at $40,000 per year.
While gifts, bank deposits, and nontraditional income sources can sometimes be used for loan qualification, income is a major barrier to obtaining a mortgage at 18.
Credit Score Minimums
Good credit is key for mortgage approval, and qualifying credit scores typically start at 620 or 640. An 18-year-old who has not established independent credit or built up a strong credit history often cannot reach credit score requirements.
Those with no credit need to build credit from scratch. Others may have only an authorized user account or short credit history. Limited credit experience makes it very hard to meet underwriting standards.
Down Payment Needs
Most lenders require a 20% down payment for conventional loan approval. First-time buyers can qualify for 3-5% down programs, but still need thousands in cash for the down payment.
Saving up enough for a down payment is difficult at any age, but particularly challenging for 18-year-olds who have not had many years in the workforce. Gifts from family are an option, but not always financially feasible.
In summary, from restrictive age policies to income, credit, and down payment roadblocks, getting a mortgage at 18 is extremely difficult without a cosigner or other special circumstances.
What is the Minimum Age to Buy a House?
While there is no legal minimum, most experts agree the realistic minimum age to buy a house without a cosigner is early to mid-20s for several reasons:
- Income potential – By mid-20s, education is often completed and career earnings increase.
- Credit history – A few years of independent credit can be established.
- Down payment savings – More time to build up a down payment.
- Financial maturity – Increased money management abilities come with age.
Here is an overview of factors that support homebuying capacity at different ages:
Age 18-22
Barriers:
- Limited income potential
- Little or no independent credit history
- Minimal savings
- Less financial experience
Enabling factors:
- Gift or loan from family for down payment
- Cosigner with good credit
- Secure, high-earning job
Age 23-26
Barriers:
- May still be building credit
- Potentially modest income and savings
Enabling factors:
- College degree with job lined up
- Couple both working
- Down payment assistance programs
Age 27-30
Barriers:
- Student debt can constrain financing
- Saving for both home and other goals
Enabling factors:
- Higher income potential
- More robust savings
- Established credit history
While individual circumstances vary greatly, the late 20s present the best balance of income, savings, credit, and financial maturity for homeownership for most people.
What is Needed to Buy a House Young?
For those hoping to buy at the youngest possible age, special circumstances and preparation may be required.
Financial Standing
Strong financial standing is key, including:
- High income – Consistently earned, verifiable income well above lender minimums
- Substantial savings – Enough funds for a down payment without straining other finances
- Low debt – Little or no student loan or credit card debt to maintain debt-to-income ratios
- Excellent credit – A long and positive credit history helps obtain the best mortgage rates
Down Payment Assistance
Down payment help in the form of gifts or subsidized loan programs may be needed. Family assistance, employer programs, and state/local buyer assistance can make down payments more feasible.
Cosigner
Most lenders require a cosigner for borrowers under 21 trying to buy a home. A cosigner with high income, a high credit score, and substantial assets may be able to help young buyers qualify and get better loan terms.
Stable Employment
Lenders want to see at least two years of stable employment in the same field or progression in a career. Having an established career path early on helps demonstrate earnings potential.
Low-Requirement Mortgage
Certain mortgage programs, like VA loans or portfolio loans from community banks, may offer more flexible age requirements or consider factors beyond age and credit. Shopping around for the best fit lender is key.
Financial Mentor
First-time homebuyers often benefit from guidance from financial mentors, like parents, housing counselors, or advisors. Their input can guide wise financial decisions and help secure financing.
What Age Can You Afford a House?
While pre-approval and qualifying for a loan are important first steps, being able to comfortably afford homeownership expenses long-term is critical.
Some key factors that influence at what age homeownership becomes affordable include:
Income Level
Your income affects what you can qualify for and comfortably afford. A higher income gives more purchasing power and the ability to take on a larger mortgage. Income potential often rises significantly between the early 20s and late 20s, improving affordability.
Debt Load
Outstanding obligations like student loans can constrain your home buying capacity. Paying down debts to lower your debt-to-income ratio improves affordability. Time is needed to pay off school loans and other installment debts.
Down Payment Size
The more you can put as a down payment, the lower your mortgage amount and monthly costs. Saving a robust down payment takes time. Gift money can help accelerate down payment savings.
Home Prices in Your Area
Higher home prices mean you need to save more for a down payment and qualify for a larger loan. High-cost areas often price out younger buyers, while lower-cost markets can be affordable sooner.
Assets
Funds for closing costs and the emergency fund for home repairs contribute to your financial readiness. As you accumulate assets with time, you can better handle ownership costs.
Cost of Living
Look at projected home costs including mortgage payments, taxes, insurance, and upkeep and how they fit your overall budget. A lower cost of living improves affordability.
While there’s no set age, your late 20s to early 30s tend to provide the best foundation of income, savings, and financial maturity to comfortably afford homeownership. Buying too soon can mean settling for less space or taking on excessive costs.
What Steps Should You Take to Buy a House Young?
For those looking to buy at the earliest feasible age, proactively building financial strength and stability in your late teens and early 20s helps pave the way for future homeownership.
1. Start Building Credit
Open a credit card or other credit account in your own name as early as possible to start accumulating positive payment history. Making all payments on time and keeping balances low are key.
2. Save for a Down Payment
Start dedicating a portion of your income to housing savings. Take advantage of workplace retirement plans that offer home purchase withdrawals. Bank gifts, tax refunds, and financial aid stipends can supplement savings.
3. Get Career Education and Training
Building in-demand skills through education and training helps land a stable, well-paying job in your chosen field to support home buying.
4. Pay Down Student Loans and Other Debt
Paying off credit cards, auto loans, and especially student loan debt expands your borrowing power for a future mortgage.
5. Create a Realistic Budget
Make and stick to a detailed budget that balances saving with sensible spending on needs and goals. Monitor spending to become an informed consumer.
6. Consult Mortgage and Credit Experts
Talk to loan officers and housing counselors early. They can provide tips tailored to your unique finances and goals to make homeownership attainable.
Laying the money management, credit, career, and budgeting foundations in your late teens and early 20s helps bring homeownership within reach by your mid to late 20s.
The Bottom Line
While legally possible, purchasing a house at 18 or 19 is highly improbable for all but exceptional cases. Most 18-year-olds simply lack the income, credit, down payment funds, and financial experience to qualify for a home loan or cover ownership costs comfortably.
With time to build your career, credit, and savings, improve budgeting skills, and pay down debts, the realistic minimum age to buy a house is in your mid to late 20s. However, being thoughtful about home affordability and avoiding stretching your finances too thin is wise at any age.
Consult experts like loan officers, real estate agents, and housing counselors for guidance on smart preparation. With concerted effort starting early, homeownership in your mid-20s can absolutely be an attainable goal.