<p>I'm currently a senior and in the college-choosing period. I have plans to go to USC since I'm getting good financial aid for my freshman year. What I'm afraid of, though, is fin aid changes for the rest of my 4-years due to the new home. </p>
<p>My parents just bought a condo in January so it was not reported in tax forms and documents for this year. It was a rather cheap home (approx. $150k) and so my parents decided to borrow money from my aunt and uncle to pay-off the home, instead of getting a loan. In turn, it makes us look like we have $150k when in reality, we're still paying back my aunt and uncle in monthly bills. I know USC uses the CSS Profile which takes home/equity into account. Will I be able to explain my "borrowing money from relative" in the CSS profile for next year? And will this affect my EFC and future funds?</p>
<p>Thank You!</p>
<p>You only report the equity in the condo, which is value minus loan balance.</p>
<p>If your parents paid $150K and borrowed $150K, there is $0 in equity and it will not affect your FA.</p>
<p>The one kicker is whether your parents actually have a mortgage with your aunt and uncle - that is, the loan is secured by the condo and has been recorded. If not then technically the loan would be personal debt (similar to credit card debt) and they would have $150K in equity that would have to be reported. If they don’t have an actual mortgage, it might be worth it for them to draw up a document and record it, then your bases are covered.</p>
<p>The CSS PROFILE question is: "Enter how much your parents owe on their home, including the current payoff amount of the mortgage and outstanding related debts on the home. Don’t include interest due, escrow payments, insurance premiums, association fees, or property taxes. Check with the mortgage company if you are not sure of the amount.</p>
<p>Only enter what your parents owe on their home; don’t include personal or consumer loans or any other debts."</p>
<p>I think you can honestly answer “$150,000” to this question, but I agree with the advice that if your parents don’t have formal documentation that ties the $150,000 to the home, they should.</p>
<p>Is this a second home? Or is this your primary residence? </p>
<p>You report your equity, which would be value minus the loan from relatives.</p>
<p>To clarify, my parents never got formal documentation for the loans from my relatives. It’s more of a personal debt and they’re just paying monthly through private checks. And yes, this is our primary residence.
Should I somehow get documentation for the loan, then? Is that the best way to attack this problem?
Thank you!</p>
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<p>I would suggest they get something in writing from the relatives.</p>
<p>^^Agree have them get something in writing regarding the loan so that there is documentation if necessary. The small hassle now could be worth what could be a bigger hassle in the future.</p>
<p>Okay, I think I will talk to my parents about everything!
Thank you everyone! :]</p>