Mortgage for age 16?

greensmoker

Hello,
My daughter is age 16. She is in full time employment but has savings and a weekend and evening job that pays quite well.
She is in a position to purchase a small property in the region of £80k and put down 25%.
The question is: Can she take out her own mortgage? She has payslips to prove her income which is steady.
Advice welcome please
Many thanks

davidmcn

No, she's not going to get any significant amount of credit until she's (at least) 18.

ACG

The problem is that until she is 18, any contract she signs can not legally be enforced. If she does not pay, it can not be repossessed. She sounds responsible enough where that will not be an issue, but if you were lending someone £60k, you would want to know you could get it back if it stopped being paid back.

Do you really want your 16 year old moving out?

AnotherJoe

Under age 18 you cannot directly own property and whilst it could be done via a trust thats not going to work with a standard mortgage. You could buy it but then would be into the extra SDLT.

foxy-stoat

You cannot legally able to own property until 18. Get her to save for another 2 years.

davidmcn

AnotherJoe wrote: »

Under age 18 you cannot directly own property

foxy-stoat wrote: »

You cannot legally able to own property until 18.

Depends on the jurisdiction (you can in Scotland, for example). However, that isn't really the problem - you can't get a mortgage for the same reason that you can't get a credit card or personal loan i.e. you could easily wriggle out of the credit agreement on the basis that you didn't understand what you were signing.

greensmoker

Thank you all for your information.

She would not move out our home, rather as an investment property.
We could guarantee the mortgage for her if that ould help.

We have looked at the option of trusts, but the issue there is that banks won't give a mortgage on that either.

ACG

Its not so much the guarantee, it is more the fact that your daughter can not legally sign a contract. If she did and did not pay the mortgage, the bank then risks reputational damage for repossessing a home from a child after letting them have a mortgage in the first place.

Financial services is heavily regulated.

Your daughter is too young to own a property and definitely too young to be a landlord.

davidmcn

greensmoker wrote: »

She would not move out our home, rather as an investment property.
We could guarantee the mortgage for her if that would help.

Nobody under 18 can have a mortgage, whether with or without a guarantor.

And when you say "investment", do you mean she's proposing to become a landlord? That brings in a whole other range of responsibilities and potential problems for the under-aged (and the question of who would want a 16 yr old as their landlord!).

greensmoker

So if we purchase the property for her and take out the mortgage for her and hold it in trust, are there any banks that would provide a mortgage?

greensmoker

the property would be managed by a property management company.
She is keen to get onto the property ladder