Buying a PPOR at 18

Discussion in 'Loans & Mortgage Brokers' started by Owlet, 25th Jul, 2015.

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  1. Owlet

    Owlet Well-Known Member

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    This is a hypothetical situation but I would like some insight in to how possible this is. My understanding is that normally you have to be 18 to sign a legal contract as sole purchaser (happy to be corrected / informed of exceptions). Max turns 18 has saved a deposit since he was 8 - birthday money, pocket money, part-time work and wants to buy a house. Finds a suitable house where he can manufacture equity and wants to buy it. How difficult is it for Max to get a loan - assume he has only just finished year 12. Even if he has parents willing to co borrow or act as guarantors - would they loan to him? (Assume current lending conditions).
     
    Owlet, 25th Jul, 2015
    #1
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    No need to be 18 to own real property, but you won't get a loan until at least 18. Without a job Max couldn't get a loan.

    Can you borrow and onlend him?

    Become joint purchasers - tax issues though.
     
    Terry_w, 25th Jul, 2015
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  3. Owlet

    Owlet Well-Known Member

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    I am assuming a part-time / casual job would be insufficient?

    On lending would be probably be possible.

    No to joint purchase.

    Buy, reno, sell in 12mths, take profit, rinse and repeat. We've got a few years to work on the strategy.
     
    Owlet, 26th Jul, 2015
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  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    casual or pt will be ok as long as the income is enough.
     
    Terry_w, 26th Jul, 2015
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  5. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    If it's a ppor affordability might be an issue with a casual or part time job. If it's a rental the rental income makes servicing much easier.

    Of course it depends a lot on the purchase price :)
     
    Jess Peletier, 26th Jul, 2015
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  6. Corey Batt

    Corey Batt Well-Known Member

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    So long as he has sufficient deposit funds + serviceability income he'll be fine. I bought my first property at 18 - great to get the bug at an early age. :)
     
    Corey Batt, 26th Jul, 2015
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  7. Owlet

    Owlet Well-Known Member

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    As did I - well just shy of the 19th birthday. But I didn't go to uni after year 12. I made the choice to get a full-time job so I could save a deposit for my own place. I still remember being asked to prove where the money came from - the regular bank deposits to one of their bank accounts from my employer wasn't obvious enough. The stamp duty and other costs went on a credit card.

    Max will have choices I didn't. Yes he could take a gap year and work but he may wish to go to uni and work part-time or do an apprenticeship or start his own business. These latter options would see him have less $ to meet serviceability requirements.
     
    Owlet, 26th Jul, 2015
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