When you think of all that homeownership entails, your thoughts likely range from managing a mortgage to mastering maintenance. And all of that is certainly true. However, to get the keys in the first place, you need to be able to do one thing: legally sign a contract.
If your home country doesn’t yet consider you a legal adult, you can’t sign for the house or the loan you’ll likely need to finance it. So, at what age can you buy a house? It depends on what your state has set as the age of majority. The age of majority is younger than you might think – usually below the legal drinking age. But even if you’re technically old enough to buy a house, is it a good idea? Let’s find out.
At what age can you legally buy a house?
The law specifies an age at which you can legally vote and legally buy alcohol, but it does not specify an age at which you can become a homeowner. Instead, the line is drawn in a different way: Each state sets its age of majority, or the age at which a resident is legally considered an adult. You can legally buy property when you reach the age of majority, which in most states is 18. (There are three exceptions: in Alabama and Nebraska the age of majority is 19, and in Mississippi it is 21.)
Before you reach the age of majority, you are legally considered a minor. And a minor cannot legally sign the contracts necessary for a real estate transaction. In some states, a minor’s name may appear on the title deed, but they may not do anything with it until they reach the age of majority. This happens when parents put their children on the title and then die, for example. In such a case, a custody, trust or guardianship is usually established to hold the property until the minor reaches majority.
The situation is the same in case of purchase with a co-signer. Even if your parent or another adult is willing to sign with you, a co-signing situation would still require your own signature. And until you reach the age of majority, that’s not an option.
Mortgage barriers for young buyers
You have to wait until the age of majority to buy a house. But even after you’ve come of age, you’ll need to carefully assess your ability to get a mortgage. A young person with little or no credit history may have difficulty getting approved for financing. Unless you’re able to make a cash offer on a home – a rarity for young adults just starting their careers and building up savings – you’ll need to take out a loan to buy.
Mortgage lenders don’t offer six-figure loans to just anyone. To obtain a mortgage, you must meet various requirements, including:
- A steady income that you can prove with pay stubs
- A good debt ratio
- A good credit score
- Enough money for a down payment, closing costs and ongoing maintenance costs
In other words, you must be able to show the lender that you are financially reliable. You may be able to legally buy a home at 18, but you usually won’t have the years of financial statements that lenders want to see. Therefore, getting a mortgage can be particularly difficult.
Are you ready to buy a house?
Beyond all the legal and financial ramifications of home ownership, consider the lifestyle implications as well. If you’re considering buying a home, you need to be prepared to stay put for at least a few years, comfortably handle the mortgage, maintenance, and more.
Plus, becoming a first-time homebuyer before many of your friends probably means making sacrifices they won’t have to. Renting can provide a sense of freedom – both financial and geographic – that landlords locked into one place don’t have. That said, you can also expect to learn some valuable lessons for first-time home buyers, and you’ll have a head start on building up your home equity. Just be sure to consider the trade-offs before making this major decision in life.
Advantages and disadvantages of buying a young house
- You immediately start building equity
- You don’t waste money on rent
- You strengthen your credit thanks to the management of your mortgage
- You learn financial responsibility and budgeting skills
- You gain stability from your own home early in life
- It can be difficult to get a mortgage
- You must provide a deposit and cover closing costs
- You’re locked into a fixed living situation, while your friends can move from location to location or town to town
- You may need to pass on other experiences as your resources are tied up in your house
- You are responsible for the maintenance of the house
At the end of the line
From what age can you buy a house? Legally, somewhere between 18 and 21, depending on the age of majority in your state. But owning a home comes with many responsibilities, including a considerable financial burden. As a young adult, you may not want to lock yourself in just yet.