How Old Do You Have to Be to Buy A House?

Miley Cyrus, Hilary Duff, and Nick Jonas all bought their first house before they were 18 years old. Kylie Jenner, Daniel Radcliffe, and Britney Spears became homeowners at the age of 18. The purchases made news and were clickbait online. But these celebrities are the exception to those who are typically buying homes that young.

In fact, a 2024 report from the National Association of Home Builders found that homeownership had actually decreased among under-35s from the previous year, and the likelihood of homeownership tends to increase with age.

Obviously, affordability can be a major factor, but certainly some people are too young to even purchase a home, right? Actually, as long as you're over 18, in most states, your main barriers to purchasing a home will be your ability to qualify for and afford a mortgage rather than legal obstacles.

How Old Do You Have To Be To Legally Purchase a Home?

Generally, you need to have reached the age of majority, or the age at which you are considered a legal adult, to sign legal documents like a home purchase contract and mortgage agreement. The age of majority in nearly every U.S. state is 18, with the exception of Alabama, Nebraska, and Mississippi.

In Alabama and Nebraska, the age of majority is 19, while the age of majority in Mississippi is 21.

Those under the age of majority need an adult to co-sign legal documents. This co-signer must be able to qualify for the mortgage and purchase, as they will be on the hook if payments aren't made.

Once a potential buyer passes the age of majority, then age isn't really a concern beyond what it might indicate about your overall financial status.

Will Mortgage Lenders Approve Young Buyers?

Your debt-to-income ratio, savings, credit history, and current life situation matter much more than your age when it comes to mortgage approval. However, those factors can correlate with age. For example, studies have shown that a Generation Z homebuyer is more likely to earn less than their area’s median income compared to older generations.

How Do You Know If You're Old Enough to Purchase a Home?

There are several signs that you're ready to enter the real estate market. You need a healthy credit report, funds for a downpayment, a desire to settle down, and a steady income to cover monthly mortgage payments and regular home maintenance. None of these factors are directly tied to your age.

In fact, some of them could be negatively impacted by unexpected financial emergencies at any point in your life. Generally, however, the more time you have to plan and build up your financial stability, the better position you'll be in when you begin your home buying journey.

What are the Employment Requirements for Buying a House?

Mortgage lenders will usually want to see two years of steady employment. This can be difficult for anyone with an inconsistent employment history, as can be the case for many younger first-time home buyers. It can also be challenging for contractors who may not have a consistent monthly income.

It's important to save your various W2s, 1099s, tax returns, and bank statements so you can offer enough proof of income to show lenders you can meet your financial obligations.

It's not just your raw income that matters, however. Lenders will look at your debt-to-income ratio to make sure you don't have too many other payments that will impact your ability to honor your mortgage contract.

Can Younger Buyers Get a Mortgage Without a Good Credit Score?

Younger buyers may struggle to qualify for a mortgage if they haven't had the time to build up their credit score. It can take years of proper credit card use to achieve the kind of strong credit history you need for mortgage approval.

First-time home buyers can consider Federal Housing Administration loans, which have more flexible credit requirements, or the utilization of a co-signer with a solid credit score and income stability. Co-signers will be responsible for the full scope of financial obligations if the borrower defaults, so it's important to enter the agreement from a place of trust and understanding.

Can You Buy a Home If You Have Student Loans?

It is not impossible to buy a house while paying student loans, but it can be harder. That's because student loans raise the "debt" part of your "debt-to-income ratio." They also impact your monthly financial obligations to other financial institutions.

Student loans can also impact your credit score. If you've been making all of your payments on time, then they can have a positive impact. Bonus points if you can guess how missing payments can impact your credit score.

What Expenses Do First-Time Home Buyers Need To Be Aware Of?

In addition to monthly mortgage payments, buyers need to have money set aside for a down payment, closing costs, and enough income to cover regular household expenses. Maintenance and repairs can generally cost around 1% of a home's value each year, if the home is on the newer side, but be prepared to budget more if the home is older or hasn’t been properly maintained.

It’s also good to have an emergency fund with three to six months of living expenses and a savings account for other unspecified needs.

Downpayment Costs

You'll want to make sure you have the money for the down payment, separate from the other closing costs. You do not necessarily need a 20% down payment to buy a home, though buying one with less will require private mortgage insurance (PMI) or a second loan. This is in addition to the regular mortgage payments and homeowner's insurance. A higher down payment will also mean more favorable mortgage rates.

Closing Costs

Finally, don't forget that closing costs can account for 2% to 5% percent of the purchase price, above and beyond the down payment. For example, a $300,000 house could have closing costs between $6,000 and $15,000. For first-time buyers, this sometimes comes as a shock.

Just ask “Shark Tank's” Barbara Corcoran who was apparently blindsided when she bought her first home.

What Is the First Step To Buying Your First Home?

A pre-approval is sort of like a test run for applying for a mortgage. You submit some financial documents and receive an estimate of the amount and rates of mortgage you should qualify for, along with a formal pre-approval letter. Many realtors and real estate agents won't even show you homes if you are not pre-approved.

Getting pre-approved can be as simple as a 10-minute phone call.

Buying your first home may seem overwhelming, but with the help of a real estate agent, it can go smoothly. Finding a good agent and applying for mortgage pre-approval should be your first steps on the journey to homeownership.

Are FHA Loans a Good Option for Young Homebuyers?

FHA loans can be a good option for young first-time homebuyers. FHA loans are backed by the Federal Housing Administration and have looser requirements to allow first-time homebuyers a better chance for mortgage approval.

While the credit score and downpayment standards for FHA loans are more flexible, there are other requirements to be aware of.

FHA loans can only be used for your primary residence and come with a permanent mortgage insurance obligation.

What Do You Do When You Find a Home You Want to Purchase?

Once you find your dream house, it's time to negotiate an offer. This includes everything from the purchase price to contingencies, or the requirements in the purchase contract that must be met for the sale to be completed. These usually include a home inspection, appraisal, financial contingency, in case a lender refuses to finance a loan, and a title search.

The terms of your mortgage contract will be laid out in a Purchase & Sale Agreement. Your real estate agent will guide you through this process.

You will also need to be approved for an actual mortgage. The most important thing to remember is that you have mortgage options. Just as you wouldn't go to only one car dealership and buy a car, you don’t need to work with the first lender you speak with.

A few things to remember:

• This purchase is much bigger, so shop around. Understanding your options is key to finding the mortgage that is right for you.
• Many states offer first-time homebuyer programs. You can search for programs in your state using this database.
• Once you are ready to apply for your mortgage loan, make sure you have all the needed documentation, including pay stubs for the last 30 days, tax forms, address records for the last two years, plus bank statements for income, assets, and identity verification.

What If You Can't Qualify for a Mortgage at a Young Age?

If your financial situation prevents you from qualifying for a good mortgage, you could look for a co-signer or apply for a less advantageous mortgage and plan to refinance in the future. Or you may decide that you are not ready to buy a house at this time.

In that case, consider moving in with family or friends or cut down on unneeded expenses to save for a future down payment and build up your credit and reduce your DTI ratio. This could save you a lot of heartache down the road.

The Bottom Line

While there is no strict age requirement to purchase a home, there's no shame in admitting you aren't quite ready for such a big commitment at this time. Consider your big financial picture to help make a decision that’s right for you.