The school needs records from the bank since the actual amount outstanding can vary day-to-day. Also, the publicly available information is limited to the amount of the lien - which is the original amount of a closed-end loan (regular style 1st or 2nd mortgages) or the maximum available credit if the facility is a home equity line of credit. If you have an equity credit line it is possible to have the records at the county show for example a $250,000 lien, but in reality you don’t owe the bank a cent because you have not drawn on the line and are just saving it for emergencies.
While the current balance owed on the loan will likely not be publicly available, the terms of the loan probably will be.
Most states don’t have the terms of the loan filed and ‘of record.’ Usually there is no way to tell if it is a 15 year loan or a 20 or 30 year one. The mortgage or deed is filed and released when paid. What is filed is the Deed of Trust or the Mortgage, NOT the loan documents. The filed documents can be 2 pages or 30 pages. Every state is different. In some states you can pull up the information, for free, with just a property address. Other states have a fee or a service with a fee to pull the information.
The OP says his mother does want to reveal the information. That’s her choice, but then he’s not going to get FA from that school.
<<
Having multiple properties with multiple equity loans is quite a feat for a non perm resident, non us citizen.
<<
Yep…and likely that is why the school wants verification.
[QUOTE=""]
I just figured schools would do a credit report on students and parents to verify items.
[/QUOTE]
? And that wouldn’t involve confidential info?
Yes, any financial info requested has to be submitted, or financial aid is jeopardized. If the school wants verification, gotta give it to them. Otherwise, you cross the school off the list if you need financial aid.
There are some weird exceptions, but in general as a third party you pretty much always need a person’s consent to pull their credit report. In the context of this question, it doesn’t make a lot of sense for the mother to consent to something like that (a credit inquiry affects her credit rating in a small way, and reveals everything about her credit history) if she is uncomfortable with just the limited inquiry over the mortgages.
I think the best thing that the OP can do is reassure her mother that this information will be use solely for financial aid purposes and won’t be used by the college for anything other than computing eligibility for financial aid. These questions can seem pretty invasive but colleges have a pretty good track record about handling these kinds of information.
You are not required to send the college anything! You are welcome to be full pay.
Not all credit report ‘pulls’ affect credit scores, even by a little. Those used for information and not for the purpose of extending credit don’t cause your report to go down at all, as would be the case here. The school is not extending credit, just looking for information. However the credit report will not show the equity in the properties, just the amount owed on the properties IF the properties were mortgaged under the parents’ signatures and SSNs (they might be owned by an LLC or other entity).
It makes perfect sense to me that the proof is requested. For US citizens, or anyone who files US tax returns , the mortgage interest would show up. Without that, one has to just take a person’s word that properties are mortgaged. Even then, a verification would likely ask for the mortgage statement.
The mortgage interest would come up that was paid the previous year. There is NO WAY that proves there is still a mortgage on the property, or how much it is. The person could have paid off that mortgage. They could have refinanced after January 1 and taken out additional loans against the property.
All your taxes show is how much mortgage interest you paid for,the tax year that just ended. Not current events in any way.
Not necessarily.
No, not always, not necessarily, but often. Not that the school would care anyways. I was verified one year–won the golden ticket, and was only going for Direct Loans. They still wanted all kinds of stuff that made no difference what so ever as to eligibility since the loans were not income driven. But that was on their list and I had to comply.
I work for a private university that uses the CSS Profile. Yes we can ask for your mortgage documents. Usually this is only asked for if we want to bypass our typical financial aid process in evaluating home equity and use professional judgment by using your documented home debt. Many financial aid offices have a formula to calculate what we think your home equity is based on the value of your home vs. purchase price/year. We can use professional judgment to override the system and use real home debt which means you will be getting more financial aid from university grants.
You can refuse to submit the information. If you go this route, submit a letter stating your mother is unwilling to provide the information for the reasons you stated. This will keep your file from being on hold pending documentation. It will impact how much aid you will receive. Whoever reviewed your financial aid package was really just trying to help you get funding.
“All your taxes show is how much mortgage interest you paid for,the tax year that just ended. Not current events in any way.”
Not true. The interest I pay on my 80K mortgage and the property taxes on my 100K house are less than what I can claim using the standard deduction. Even with tithing it is about equal.
It is a pain to provide all the documentation they may ask for, but if your mom won’t do it, don’t expect any help from the college.
KKmama, agreed if you use the standard deduction.
But my point was that the mortgage interest paid last year does not tell whether the family cirrently has a mortgage on the property. And THAT is what the college wants to know.
But here the OP is talking properTIES. The family has an investment property portfolio with some interesting financial variables, this isn’t about one home mortgage. I can’t even imagine that equity makes much difference here if the homes are rentals with income. There is information missing here, that is guaranteed. Try popping by the bank as a foreigner and getting a nice normal mortgage with 20% down on your primary residence let alone multiple home equity loans on multiple properties.
I’m really glad I reached out to the CC community. A lot of this information has been really helpful. Especially FAOHelp, thank you!
On her tax return, why isn’t your mother listing the mortgage interest on those rental properties as a business expense?
^^ because they are probably held in an LLC or other business entity to protect against liability. Common.