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Buying a house, financial aid effects.

mmccdd123mmccdd123 1 replies1 threads New Member
Hello everyone,

So my parents are wanting to buy a house in the near future. They do not meet the income requirements and they have asked me if I could be a co borrower alongwith them. I initially dont have a problem. My question though is that I am still in school, and although I have an income, I will be in school for at least the next 6, 7 years, so will having a house affect my chances of getting financial aid? I wont be living in the house, so Id be a non occupying borrower. But I dont want to take away from financial aid possibilities since I will be in school for the next few years and rely on it to pay for school.

Any advice is much appreciated, thank you!
13 replies
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Replies to: Buying a house, financial aid effects.

  • Eeyore123Eeyore123 2089 replies25 threads Senior Member
    I am having a very difficult time putting together a scenario for a person that has enough income to impact a mortgage application, goes to school (part time?), and is looking for financial aid.

    Are you able to comfortably pay the entire amount of the mortgage as a “gift” to your parents? If not, don’t put your name on the paperwork.
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  • SybyllaSybylla 5117 replies61 threads Senior Member
    Just no.
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  • cptofthehousecptofthehouse 30510 replies59 threads Senior Member
    No. You own part of that house? Then that part has to be reported as your assets on some financial aid forms, such as PROFILE.
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  • califmom23califmom23 50 replies5 threads Junior Member
    No. You will be financially responsible for the payments as much as your parents. If they are late on payment or miss a payment, it will impact your credit as well. In addition, you will be considered a homeowner and will need to include this information on any financial aid forms.
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  • mmccdd123mmccdd123 1 replies1 threads New Member
    I am aware that the asset will have to be included. My question was more geared towards, if my aid will go down because of it.
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  • Eeyore123Eeyore123 2089 replies25 threads Senior Member
    A co borrower owns part of the house. Since you don’t live in it, I believe that your part of the equity would be counted as a investment. Any investment normally reduces any financial aid. But theoretically this money would be somewhere else if it wasn’t in the house.
    Have you actually talked to a lender? I don’t see how an underwriter would sign off on this loan.
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  • Happytimes2001Happytimes2001 2248 replies18 threads Senior Member
    No, some parents lean on their children forever taking loans which are never "repaid", not acting financially responsible etc. Parents owe their kids a decent living until they are 18. It doesn't go the other way. Don't let guilt persuade you to help them. If they cannot afford a home they can work a second job or wait. The impact to FA would be very very bad for you.
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  • BelknapPointBelknapPoint 4985 replies19 threads Senior Member
    I am aware that the asset will have to be included. My question was more geared towards, if my aid will go down because of it.

    You haven't provided nearly enough information for anyone to give you a meaningful answer to your question.
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  • thumper1thumper1 78510 replies3537 threads Senior Member
    How much is your income that you would be considered a qualified co-signer for a loan? This makes no sense. If you have that much money, use it to pay your college costs not buy a house for your parents.

    Like a poster above, I’m having trouble with this scenario. You are concerned about financial aid, but you think being a a co-owner of a house is a good idea? Especially with people who can’t get the mortgage all by themselves.

    Just say no. And please, take a personal finance course.
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  • kelsmomkelsmom 16165 replies99 threads Senior Member
    I agree.
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  • cptofthehousecptofthehouse 30510 replies59 threads Senior Member
    mmccdd123 wrote: »
    I am aware that the asset will have to be included. My question was more geared towards, if my aid will go down because of it.

    At certain PROFILE schools, even a personal residence is included in one’s assets. Students generally are hit much harder for the assets they earn than the parents. 20-30% of the value of your share of the house could be added to your institutional EFC reducing your financial aid.

    If the house is not your primary residence, it counts as an asset on FAFSA as investment property and like any asset , if it’s student owned, 20% of your share of the market value will be go against your EFC, reducing need, and yes, possibly reducing aid

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  • austinmshauriaustinmshauri 10037 replies389 threads Senior Member
    If your parents can't afford a house right now they shouldn't buy one yet. Your financial aid could certainly be reduced if you own a home. Think about it from the college's point of view. If you can afford a mortgage, why would they think you need grants to pay for tuition?
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  • coolguy40coolguy40 2947 replies8 threads Senior Member
    Here's my advice...DON'T
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