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Will buying a home affect my financial aid?

jadames23jadames23 Posts: 18Registered User New Member
I am planning on buying a home under my name next year because i am tired of paying rent. I plan on getting a 4 bedroom home and renting out the rooms to help pay for the mortgage, but i don't want to do this if it is going to affect my financial aid. Will buying the house, and renting it out affect how much money my family would get for financial aid?
Post edited by jadames23 on
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Replies to: Will buying a home affect my financial aid?

  • jadames23jadames23 Posts: 18Registered User New Member
    It would also be my first home, i know that first home's aren't reported on fasfa, but i'm not sure if this is still the case with me going to rent it out.
  • Erin's DadErin's Dad Posts: 19,114Super Moderator Senior Member
    Rent you receive will be considered income and will be considered in FA.
  • kelsmomkelsmom Posts: 12,512Super Moderator Senior Member
    If you are renting rooms but the rooms do not have a separate entrance/cooking facilities/bathroom, you wouldn't have to claim a portion of the house as an asset. However, you should be reporting the income on your tax return so it may increase your EFC.
  • jadames23jadames23 Posts: 18Registered User New Member
    the rooms would not have separate rooms, it is going to be a one family house but just renting the rooms to other college students. Would it be better to put the house under one of my parents name instead of under my name, or would it still be considered the same process
  • kelsmomkelsmom Posts: 12,512Super Moderator Senior Member
    It depends. What is your current situation? Do you get any grants, or is your aid just loans? If you get grants, what is your EFC? How old are you?
  • jadames23jadames23 Posts: 18Registered User New Member
    i am a junior, i would be a senior next year. I do get a large amount of grants, my EFC is 71. I would be 21 for the time i planned on making the purchase.
  • kelsmomkelsmom Posts: 12,512Super Moderator Senior Member
    Hmmm ... you would only be using 2010 income for 2011-12, which would be your last year in school. So it wouldn't matter. You can get the home in your name, because it's already September 2010. Even if you get the house & roommates before the end of the year, you wouldn't have earned much from rent by the end of December.
  • RedrosesRedroses Posts: 3,293- Senior Member
    Where is the down payee t coming from. It would be unusual for someone with a 71 EFC to have the down payment and be given a mortgage.
  • AspiringInSalemAspiringInSalem Posts: 83Registered User Junior Member
    Are you planning on taking out a mortgage? If so you will have mortgage payments, property taxes and upkeep to pay. When figuring your income, these expenses are subtracted from the rent money you receive. Usually, your costs in the first years of owning a rental will exceed your income. If that's the case, you should not have any reportable income from the house.
  • jadames23jadames23 Posts: 18Registered User New Member
    I've received scholarships, and am currently working and just saving money. I have been saving for something like this since I was 18, and have about 10,000 to put down for a down payment. I would be buying the house August 2011, not now. Would I really be able to subtract mortgage payments, property taxes, and upkeep from the rent money i receive? because I am planning for the rent money to go directly to the mortgage so that would mean i wouldn't be receiving any income
  • perilousperilous Posts: 130Registered User Junior Member
    If you have $10,000 in your name and reported it on your FAFSA, your EFC should be at least $2K+, not 71....something doesn't add up here....
  • jadames23jadames23 Posts: 18Registered User New Member
    received a 5 k scholarship this year, got back 3 k from school, and had 2 k. advice is what i'm looking for not criticism thanks.
  • perilousperilous Posts: 130Registered User Junior Member
    ...a little sensitive? Sorry, just doesn't add up....EFC doesn't reflect the money you have...further, scholarships generally go to the school to pay for college, not to be put in the bank to be used for a downpayment on real estate...oh well, good luck!
  • sk8rmomsk8rmom Posts: 5,746Registered User Senior Member
    perilous, proceeds of student aid do not affect EFC.
  • perilousperilous Posts: 130Registered User Junior Member
    Yes, but $10K of cash does!!!!
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