<p>The CSS PROFILE asks the student "what do your parents owe on their home?" (PA 135A)</p>
<p>If parents have a home equity line of credit that is not being used, is the total amount of the HELOC to be added to the first mortgage to get the amount owed (since the HELOC is an emcumbrance and reduces the amount of equity available for new borrowing)?</p>
<p>Or, is only the amount of the HELOC actually drawn against included?</p>
<p>Only what is drawn on the HELO is used.</p>
<p>One thing you should also consider re: value of your home-
The value you should put down is the value if you had to sell it today, AS IS, without doing any improvements. Recently sold homes in your neighborhood were probably fixed up before sale, so they will be a bit higher than your value. Also, I’ve read that you can reduce the value by the amount of real estate commissions you would pay to sell.</p>
<p>I believe the clarifications on the CSS Profile state the “amount owed on home” is defined by mortgage only, NOT HELOC. HELOC is considered a Consumer Loan/Line of Credit and not able to be deducted (as would be the case with other consumer debt such as credit card balances). Check the Profile site again!</p>
<p>As far as I know, the amount of money drawn on a HELOC is considered like a second mortgage because your home is the the collateral upon which the line is extended. If one sells their house and they have a HELOC it must be satisfied like any 1st or 2nd mortgage when paying off the debt. Plus interest paid on it is deductible. </p>
<p>If there are any CPAs or FAOs on this forum, maybe they can weigh in on this.</p>
<p>The HELOC amounts drawn and any other amounts are included as mortgages up to a limit on FAFSA; not 100% sure of what they are, so I won’t state what I think they are, but anyone can google the subject or look it up on FAFSA rules . But individual schools on PROFILE can use whatever they want in this area. Though I don’t know any specific school that uses specific limitations, it is entirely possibl.</p>
<p>From the CSS Profile instructions
</p>
<p>Looks like HELOC balances should be included.</p>
<p>FAFSA doesn’t ask for home equity or debt.</p>
<p>Ach. I dropped the ball on this one. FAFSA does not include values on a primary home so unless you are talking about secondary housing, HELOCs or mortgages won’t matter. Sorry. Suffered brain freeze here. Thanks Vballmom and MomofJandl. Both of you are absolutely right.</p>
<p>But, yes, HELOCs are included a long with the mortgage balances on Profile up to certain stated limits.</p>
<p>Thanks, All. I did get confirmation that CSS Profile wants only the amount of a HELOC that you’re paying down, and that makes sense. My concern when I asked the question was that if I didn’t report the total of the untapped HELOC, which is an encumbrance on the property, the school would think I could borrow more against the property than we can. But since we do have the full amount of the HELOC available for college expenses and simply are waiting until we have no choice but to use it, I guess it’s appropriate not to reduce our equity by that amount.</p>
<p>I have a question about this. Our roof failed, as did the supporting wall. We needed to get a HELOC to take care of it and are also replacing damaged floor. We will be using the entire HELOC for this work. I’m assuming (hoping, really) that colleges won’t penalize for desperately needed home repairs by telling us that we should have used a HELOC for tuition. Anyone have a similar experience?</p>
<p>Please use old threads for information only, do not post and revive them. Instead, use the New Thread button to ask your question.</p>