Can Minors Be on the Deed of Trust for a House?
A deed of trust is sometimes confused with a deed. However, there are very important differences between the two real estate documents. A deed of trust is actually a loan document provided by the lender. The borrowers are listed on the deed of trust. Generally, minors cannot qualify as a borrower or co-signer. State laws determine the legal age of adulthood.
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Deed of Trust Vs. Deed
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When a home loan is obtained, the lender provides a series of documents for the borrowers to sign. Depending on the state the property is located in, one of these documents is the deed of trust, or the mortgage. The deed of trust acts as the security instrument to secure the lender's interest in the property until the loan is paid in full. The document places the property in control of a trustee who will act on behalf of the lender in the situation that a foreclosure occurs.
A deed, on the other hand, is a legal document that conveys property ownership rights between the sellers and the buyers. It lists the names of the parties, the sales price paid for the property and a legal description. Once filed on record, the buyers are considered the owners of the property.
Age of Adulthood
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Individual state laws determine at what age a minor child becomes an adult. For many states, the age is 18; however, it does vary. When adulthood is reached, the person becomes responsible for his own actions and his parents are no longer considered responsible for him. At the age of adulthood, the right to apply for loans and credit cards is also obtained in most states.
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Loan Approval
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Most mortgage lenders share a common list of eligibility requirements that loan applicants must meet in order to be approved for a mortgage loan. According to LendingTree, those applying for a Federal Housing Administration loan must be a resident of the U.S., have a Social Security number and be the age of adulthood in their state. In addition to these requirements, the applicant must also earn enough income to afford the monthly payments and other bills. FHA loans are generally marketed towards first-time home buyers with little money to put toward a down payment or a lower credit score. Other mortgage lenders are stricter in terms of down payments and credit scores.
Considerations
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Because of the fact that a home buyer must be considered a legal adult under state law in order to obtain a home mortgage loan to purchase a house, a minor cannot be listed on the deed of trust. A minor cannot qualify for a loan on his own, or qualify as a co-signer for another person's loan. Once a person reaches adulthood, she can apply for a loan. Final approval is subject to meeting the other requirements and the lender's decision.
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