You may be wandering if it is possible to buy a home at age 20. The fact remains that it is very possible to achieve such huge feat at such an age! Several benefits and opportunities are attached to taking such a responsibility in the home market at such a young age.

Is it Possible to Buy a Home at Age 20? YES [Keep Reading]

Firstly, you have overcome fear and ignorance by acquiring your first property. Besides, you have started offsetting expenses, even as you save more money. In addition, it enables you to establish excellent credit as you build your asset. You will also gain tax advantage as you get management, education and house purchasing at age 20. There are some factors to consider for you to buy a home at age 20. These factors are discussed below:

🏬Stable work history

Your income and work history are important points here. When you approach lenders, they will want to be so sure of your ability to pay back your loan. They will use these two points mentioned here as criteria for you to obtain the loan. It is advisable you have two years of W2s with low employment gaps.

🏦Down payment, closing cost and cash

Down payment is an important factor for obtaining a loan with favorable terms. A 20% down payment is compulsory. This factor will greatly assist you, especially if you lack in other areas. Your inability to save 20% will result in paying more of closing cost, higher interest rate and payment for Private Mortgage Insurance (PMI).

🏥Established credit

Despite your stable job and ability to offer down payment, your lenders desire to ascertain your integrity to repay the loan. A track record of this will be requested as another criterion for a loan. You may still want to ask if all these steps are possible to accomplish at age 20. The answer is absolutely!

Buying a home at age 20: consider 2 more issues:


Apparently, at age 20, you will unlikely be earning high income. This implies you are purchasing an inexpensive loan in an inexpensive location. A lot of young adults will want to reach out and acquire a home which is more expensive on assumption that their incomes will increase, rather than shopping for an inexpensive one. Remember that you will only be allowed a loan in which home payment, insurance and taxes do not exceed 33% of your gross income.

Some lenders charge a higher interest rate for a young buyer since it is impossible to achieve a high credit score within two years of entering adulthood. In view of this, arrange for your interest and make it exceed prevailing interest rates by 2%.


Many lenders require a seller to purchase property insurance worth a year’s value. Proof of this payment is expected to be presented at closing. They protect their investment this way, especially if there are damages done to the house. Insurance companies will not insure a dilapidated home. Also, they will not underwrite a house if there are broken windows, missing rails around desks, missing furnaces and patched roofs.

🏘What is the Value of my Home?

🏕Buying a house at age 20-Benson’s story

The story you are about to read will reveal to you how a young man at age 20 bought a home, his mistakes and achievements. This will not only motivate you, but will also guide you in the home buying process. Read on.

Benson got his first real job in 2005 at age of 17 and he stayed on the job for    21/2 years.

He was living with his parents and at the same time schooling. While he saved half of his income, he committed the remaining half into his Roth IRA. At age 19, he and his wife moved into a new apartment. The couple was working and cautious of their expenses. They were saving $400 monthly then. A year later, they moved into his mother in-law’s house to avoid signing a long lease for another year while shopping for a home. Benson got a major breakthrough by working his first nuclear plant outage. He earned $5,000 that month, they then put together $11,000 total. Although, most houses were in the $50,000 range, they were able to gather 20% down payment. At 19, he started shopping for a home and the couple closed three months after Benson turned 20.

They applied for loan from a local mortgage company but unfortunately, they have no credit scores. This made them passed through tough process as the lender manually underwrote the loan.  Rather than processing it through a big bank for a referral fee, it was processed through their mortgage company. They passed through this difficult and more expensive process because they were unable to meet all the conditions to buy a home. Although, they have a solid working history and a down payment, they lack credit scores.

🏜Lessons to learn

  1. Proper planning

Plan and set your goal of buying a house early. Benson did not set a goal of buying a house when he was 17 and 18. Had he planned and took action earlier, he would have worked more hours and achieve a larger savings.

   2. Credit score

Benson avoided credit because he didn’t see any need for it. He would have gotten a credit card at 18 and paid it off in full or monthly basis. This would have positioned him to purchase a home with ease at a drastically reduced interest rate having got two years of established credit history.

   3. Down payment

Benson paid more in closing cost than necessary. If he had originally gotten a 15 year loan with a 20% down payment, this cost would have been avoided while he would have built up equity at a faster rate.

   4. Increase the capital payment

This is an effective method at the early period of the loan payment as you will receive a return rate which is equal to the interest rate. It will also reduce the duration of the loan payment. He did not follow this principle as he thought he was winning financially with his mortgage.


The decision to buy a house remains a big life decision which should never be made lightly. You too can buy a house at age 20 if you follow the principles and guidelines in this article. However, you need guidance to scale through this process.

The best thing you can do is to reach out to a real estate agent who can help you walk through the process and make sure you know the ins and outs of what’s involved. Contact Regan Laughlin, a seasoned, experienced and competent Real Estate Agent.

Call or text RL Real Estate Group at 605-212-8431 for help! You can also visit her website at for more information.

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How To Buy A Home At Age 20
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How To Buy A Home At Age 20
You may be wandering if it is possible to buy a home at age 20. The fact remains that it is very possible to achieve such huge feat at such an age! Several benefits and opportunities are attached to taking such a responsibility in the home market at such a young age.
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