Hi, I’m currently in my freshman year and I’m wondering if changing home ownership from my parents to my grandparents for financial aid be suspicious/illegal? My sister is currently applying for college and is screwed over by the FAFSA because of our home ownership even though we desperately need financial aid (the current annual household income of 4 is < 30k). The house was bought for ~300k (about 8 years ago), but was only possible because of borrowing a lot of money from relatives and both my parents saving up for over 15 years. Barely any of the mortgage has been paid off; it’ll take at least another 15 years to pay it off… So is there anyway to transfer this home ownership to my grandparents because by the time I have to apply for college, my family will really need any financial aid that I can get.
You think the home you live in is being counted in FAFSA, or do you mean institutional aid? You are a freshman in HS? WHo is giving you this info?
You are misinformed.
Your primary residence…the home you live in…is NOT NOT NOT mentioned on the FAFSA form…at all in any way.
Where do you think this is on the FAFSA…because…it’s not there. Give us a question number.
The FAFSA DOES ask for values of real estate but specifically excludes your primary residence.
Now…if this is a secondary piece of real estate or a rental property…that’s another story.
Please clarify.
If your sister put the home you live in on her FAFSA…she goofed but the good news…is she can change it! And resubmit to her colleges.
First things first: with such a large mortgage outstanding, there’s no way that the company that holds the mortgage will allow ownership to be transferred unless A) the mortgage is paid off, or B) the prospective owners are qualified and agree to assume the mortgage payments.
But still! You said you have no equity it in! This in no way counts against anyone, in any scenario. So your information is completely misguided.
@BelknapPoint agreed…but for FAFSA purposes, if this is the family primary residence…it’s NOT on the fafsa.
To @UltimateTS are you talking about the FAFSA, or the Profile…or the net price calculators on your sister’s college list.
It seems that I’m really ignorant about this entire process. I think what I meant is like what @thumper1 said the CSS profile and Questbridge
If they borrowed from relatives and your parents invested their savings, then there IS some equity. But as said, you cant just transfer ownership. Some portion of the price is still owed the mortgage co and they won’t let it happen unless the new owners qualify. (Similar to selling. This mortgage may not even be transferable, depending on that contract.)
So your sister and you need to be lo be looking at affordable colleges- low cost, or with generous need based aid that doesn’t overweight equity or value, or schools with great merit aid, etc.
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household income of 4 is < 30k). The house was bought for ~300k
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How did a Family with a very low income get a mortgage for $300k???
Do your parents own a business?
Do your parents have a lot in savings/investments?
Even with css profile, a home with little/no equity will not affect anything.
@mom2collegekids sounds like extended family loaned/gave a large portion of the house cost. On paper, the mortgage is probably a small fraction of the home value, leaving equity on paper to be high.
@UltimateTS is that the situation? your parents got money from family for a larger down payment, so they could buy a house they couldnt have afforded?
So…how much equity does your family have in your primary residence. In other words…what could you sell it for today…minus what you owe on it?
So if you could sell the house for $500,000 and you owe $250,000…your equity would be $250,000. And the most colleges do not tap 100% of the equity. Typically it’s a percentage of your family income.
Something isn’t right with your story.
Re: transferring ownership. We did that in our family when a parent died. There was a small mortgage on the property and the new owner was REQUIRED to either pay it off…or take out her own mortgage for the property.
Does your family own a business?