Buying a house, financial aid effects.

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!

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.

Just no.

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.

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.

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.

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.

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.

You haven’t provided nearly enough information for anyone to give you a meaningful answer to your question.

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.

I agree.

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

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?

Here’s my advice…DON’T