yetidog1

I have a home equity line of credit that I plan to use, but have not yet, for some expected expenses. For Financial Aid purposes (FASBA/CSS Profile) is the value of the credit line included in the value of my house or added to my mortgage amount?

For Example:
Would it be the value of the home $100k minus $70k mortgage and $10K line of credit= $20k net asset value.
OR
Home value $100K minus $70k mortgage =$30K net asset value
Hence a change of $10K in my asset value.

I could not find where home equity lines of credit are addressed in the FASBA or CSS profile information.

All thoughts and comments will be appreciated.

bluebayou

it is neither an asset nor a liability.

FAFSA does not consider home equity, nor home mortgage nor personal debt which is why you could not find it there. Profile uses home equity (market value less mortgage less home equity lines, only if they have a balance due). If the balance due is zero on the HEC, then you don't include it. If, say, you borrow $10k against the HEC, then you would reduce your home equity by that amount, but, of course, you'd also have $10k in cash in the bank, (unless you spend it prior to completing Profile).

momfromme

If you haven't used your line of credit, it hasn't reduced your equity. Once you use it, then your equity has decreased, leaving you with a lesser amount of assets (unless you hold it in some other form, such as a bank account).

somemom

FAFSA does not care about your home value or your mortgage amount, so it is not anything for that.

I think if you used the HELOC and took that $10k to pay off your car, then you would say $100k home value, $80k mortgage, $20k equity, which is better than $30k equity and $10k owed on the car

momfromme

Yes, FAFSA doesn't care about home equity, but PROFILE does.

rlm919

I know on one form we had to list the available amount if we had a home equity line. Was frustrating because we had just paid it off. Could have been a schools finaid app though.