CSS Profile...Home Values if House Is Worth Less than I Paid?

perilous · 11-04-2009, 06:09 PM

If my house is worth less today than what I paid for it 4 years ago, will they replace my home value with the number generated by the housing multiplier index -- for example, on FinAid.com, my purchase price of $250K purchased in 2002 says the home is worth $310K today, but my market is actually less than $250K. Should I just use the lower number anyway? Does anyone know how the schools will treat this info?

THANKS!!!

okigotoschoolnow · 11-04-2009, 07:49 PM

From my understanding, nearly all financial applications are asking for value and income from the previous year unless otherwise stated.

That being said, if they're asking for the value of your home, Id say its current, market value. You cant expect them to go off of last years value when last year has passed and that value went with it, right?

swimcatsmom · 11-04-2009, 07:59 PM

Assets are reported at your current equity in them. So for a house that would be the current value less any mortgage on the property.

Income is prior year, not assets.

perilous · 11-06-2009, 05:44 PM

Let me clarify my question...my understanding in the PROFILE process is that they will replace your stated home value on the form IF an alternative calculation based on the original cost of the home and when bought as per something called the housing multiplier index generates a higher value.

A version of this multiplier is at finaid.org; however, it is based on 2006 tables pre-recession. As a result, the calculation results in a higher value than it should based on the current economic situation. I am wondering if anyone knows how CSS PROFILE is calculating this alternative value this year and what the policy may be at schools because of this anomoly? Or does anyone know where there is a more current housing multiplier index calculator that properly reflects the impacts of the recession on home values?

Thanks!!!

vballmom · 11-06-2009, 06:27 PM

What Profile schools do with the home equity value is often quite mysterious. On some schools' financial aid websites you might be able to glean whether that school uses a multiplier or not, but for most schools it seems difficult to get that information. You might call the school's financial aid office directly to ask.

I think the best you can do is put the current value market value of your home, what you owe on the home, and what your purchase price was (questions PA-130A through 145A). If you're underwater, your net equity will be negative. If you're not underwater, you will have some net equity which will be included in the schools' formulas.

From the Profile instructions (in case this helps anyone else reading):

Quote:

If your parents own a home, enter how much the home is worth. Use the price they could reasonably expect to receive for their home if it were sold today. Don't use assessed, insured, or tax value.

momofthreeboys · 11-06-2009, 06:40 PM

I just call a realtor friend of mine each year and have her look up comps. I "save" the paperwork she sends me in case the college needs validation and I use the comporables on our finaid apps. I looked at some of those calculators and Zillow and the sort and they were so wacked out. I do the same thing for our rental properties which are totally in the toilet. Comps are far more accurate. Yes, this has been a declining number the past couple years. If you haven't owned your home many years, then yes, you could have a negative value on your home and no equity...it's happening to lots of people who bought at the peak four or five years ago. I am not aware that finaid people go in and change numbers without first requesting substantiation for the numbers a family used, but I could be wrong about that.

Mayfair · 11-06-2009, 07:13 PM

"Income is prior year, not assets. "

I always thought income was current year as well. The Profile specifically asks something along the lines of income for 2009, if tax returns aren't completed use pay stubs and previous year's returns to estimate.

swimcatsmom · 11-06-2009, 09:38 PM

Most schools normal financial aid deadlines tend to be around February/March (except for ED). They ask for the previous years income - as in when you submit your FA application in February 2010 they ask about your 2009 income which, in 2010, is the previous year's income. They generally want the asset values as of the day you file.

If someone is filing an early aid application because of ED then yes they would have to estimate the current year income then go back and correct it once the year is over and they know their actual income. But for regular applicants and ongoing students most will be filing in 2010, so 2009 income will be the previous year's income.

2collegewego · 11-07-2009, 04:18 AM

OP, I would add a comment at the end. You can refer to the question you are addressing and just add a note that says that, because of declining home values, the house is currently worth less than you paid for it.