I'm 17, how do I get financing

15 Replies

I'm 17 and I want to buy my first house to buy and hold to rent. I want to know how to get financed or how to get the money I don't have a credit score yet because I'm 17. I have a job part time that makes about $18,000 a year. But no credit score. Any ideas??? Thanks

Establish credit

I bought my house at 22. I had the same issue because I was so young and didn't have enough established credit. Having 3 different lines of credit would be good. Lenders like to see a variety and multiple active lines of credit. Be RESPONSIBLE about getting credit cards. 3 options I was able to get in order to establish credit were the following:
1) Secured Credit Card from my credit union
2) Capitol zone card (they had a low limit card they were willing to give me)
3) Retail card (Kohls dept store) retail cards have very high interest rates but are easy to get approved for.
The key to all these lines is to have them show up on your credit report as active. 1 year would be good. Active means you just need to use them enough to show responsibility of payment. So you don't have to put much on them per month to show that. I would pay my phone bill with my card... Then pay it off when bill came. Or I would use the Capitol one card just for gas and pay that off each month too. Just these little bits will built your credit story.

You'll also need down payment money saved up. If you are doing a FHA loan, they are strict about money being yours and not gifted from someone. Talk to a local lender and get the scoop on current loan programs. I'd say one year you could be in good shape!!! Good luck!

as far as i know you have to be 18 to get a credit card, so how els could i establish credit?

Well done, Shane! You are on the right track to great success!  

My wife and I bought out first property when we were 20.  We had to save up for a year, get our credit started with a Sears credit card, pay off all our debts, and use both our incomes to buy our first property.  I think the advice that you have been given here is very sound. 

You may want to find a realtor in your area that you can work with and that is willing to help get you into your first property. A good realtor will help you do anything necessary to help you buy, especially if they believe that you will be a repeat buyer. When you are the buyer, realtors work for you (at no charge). A good realtor will write letters on your behalf to help you establish credit, get you pre-qualified so you are ready to buy, find unique deals that you can afford, etc.  Good luck!

In the United States you generally have to be 18 years of age or older to enter into a "binding" contract legally.  This is referred to as "Legal Age".  Until the age of 18, the contract is not binding.  A minor can enter a contract at any age provided all parties agree, it is just not binding.


A conventional mortgage contract requires Legal Age.  

Age has nothing to do with credit score except that many creditors will not extend credit to a minor since they can not be bound.  As such, a minor can get a joint or co-signed account at very young ages to establish credit.  It is fairly common.

Is a joint or co-signed account possible?  If so, pursue that or simply wait until you are 18.

All this said, your enthusiasm is awesome.  Just don't go credit crazy when you turn 18.

Shane you are in the right track. Starting early in life is best way to build a portfolio.

One way to build your portfolio is use lease option or owner financing. To meet your legal requirements, you may consider taking your parents help.

@Shane Spaulding - You can't legally get a loan until you are 18, but once you are 18 you will need to meet conforming lending requirements to get a traditional loan.  

Maybe your parents can cosign? 

Keep on saving up as much as you can then once you turn 18 try to go for a conventional loan.

Hi @Shane Spaulding , congrats on getting started so young! As others have mentioned you may not be able to get a mortgage until you are 18, but you may want to consider partnering with someone who can (perhaps a family member or friend). If you can find a really good deal, you may be able to find someone who will help finance it.

Good luck!

Anything is possible in REI. The only limitation is the one you put on yourself. Listen to BP podcast 81. Michael started when he was 18. Go to a BP meet up or a REIA in your area and offer to work for a investor. Don't try to learn everything. Pick a focus. and stick to it.

cheers!

mark

@Shane Spaulding 

I started when I was 17, and also couldn't get a loan. I used my saved up cash to fix up an old mobile home and rent it out. At the time (many hears ago!), i was able to spend about $3-4k to get it rent ready. I still have it today and it has paid for itself over and over and over. Another perk was when I did get a little older, it helped me get loans because of the stead income it brought in. Just food for thought!

@Shane Spaulding Your only a year away.  Just keeps saving and try to find a mentor in your area.  You might even be able to make a little extra cash while doing it.  I'm sure there's tons of landlords out there who would appreciate a enthusiastic young guy interested in real estate to help them rehab a house, clean between tenants or even just to provide lawn care.  Then when you come of age maybe one will be willing to partner up with you.  That way there credit will get the mortgage and your credit will be established by being on it.

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