How Younger Adults Can Position Themselves for Homeownership

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In many circles, particularly those comprised mostly of younger people, owning a home may seem like something that’s only for older adults. Because homeownership is often achieved a bit later in life after we’ve had time to accumulate the proper savings and funds, this kind of basic association is understandable.

At VIP Mortgage Inc., however, we’re here to tell you that apart from reputation, there’s nothing actually stopping younger adults from becoming homeowners if they take the proper steps. We offer a variety of home mortgages and mortgage rates that are great for a variety of potential buyers, including younger first-timers. Let’s go over the legal requirements present here, the obstacles to owning a home at a younger age, and some tips for moving forward if this is an area you’re looking at.

Legal Home Purchasing Age

How old is old enough to purchase a home? Technically, like numerous other activities that become legal this age, the answer is 18 years old. This is the point at which you become a legal adult and can enter binding contracts, such as a mortgage.

Primary Age Concerns

Now, the primary concern for young adults who have only recently crossed the 18-year threshold, or even for many in their early 20s: Qualifying for a loan is not a guarantee. A big part of this process involves building up a lengthy credit history and the proper income level to afford a mortgage, but many people this age have not been able to accomplish this yet. They often don’t have robust credit scores due to a limited history of borrowing.

Tips for Younger Prospective Homeowners

If you’re on the younger side and attempting to put yourself into a strong position for homeownership as soon as possible, here are some general tips we can offer:

  • Income: It’s pretty straightforward – you have to have an adequate income level to cover the expenses associated with homeownership, from the mortgage down payment to monthly payments, closing costs, property taxes and others. You have to be able to prove that this income stream is steady and reliable, as most lenders require at least a year of pay stubs to prove consistency.
  • Credit score: In addition, approval often hinges on having a solid credit score, which will help dictate the rates and programs you qualify for. Raising your credit score involves utilizing and properly paying down credit accounts.
  • Down payment: Down payment percentages will range from 3.5% of the home price up to 20% depending on your loan program and other factors. You need to have this amount saved up in advance to move forward.
  • Debt: In addition to your credit, lenders will look at your overall debt and how it compares to your income level. The magic number in the mortgage industry is 43% – if your debt is at this percentage of your income or higher, it could be an issue.

For more on how younger adults can put themselves in a position to own a home, or to learn about any of our mortgage loan services, speak to the staff at VIP Mortgage Inc. today.

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